01 Aug 2023
The Treasury Committee has called for a 'systematic review' into the costs associated with over a thousand 'complicated' tax reliefs.
The Committee warned that certain tax reliefs are open to abuse, and, in some cases, fraud.
It found that there are over 1,180 tax reliefs currently in operation, but only 365 of these have official costings. The cross-party Committee has warned that the UK tax system is 'too complex', and that the scrutiny of existing reliefs is inadequate.
Analysis carried out by HMRC revealed that 105 of the 1,180 tax reliefs cost £195 billion. The Treasury Committee has urged HMRC to publish costings for all tax reliefs from the 2025/26 tax year onwards.
Commenting on the matter, Harriet Baldwin MP, Chair of the Treasury Committee, said: 'Our tax system is too complicated, and the proliferation of un-costed tax breaks adds to that complexity. While some reliefs are very effective, others are prone to abuse or simply lie dormant, cluttering the ever-expanding tax code. The fact we only have costings for a third of reliefs is staggering – and something which needs rectifying with urgency.'