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HMRC accused of failing to monitor tax reliefs

26 Mar 2015

MPs on the Public Accounts Committee (PAC) have accused HM Revenue & Customs (HMRC) of underestimating the number of tax reliefs being used by businesses.

The PAC has expressed concern on the cost these reliefs put on public finances.

Chairman of the PAC, Margaret Hodge, said: ‘HM Treasury and HMRC do not keep track of those tax reliefs intended to influence behaviour.

‘They do not adequately report to Parliament or the public on whether reliefs are working as intended and what they cost and whether they represent good value for money.

‘HMRC does not effectively monitor changes in the cost of tax reliefs, so is slow in identifying instances where a relief is being exploited for a purpose Parliament did not intend.’

An HMRC spokesperson responded: ‘As a result of our compliance efforts and the £1 billion extra investment over this Parliament, we have secured more than £100 billion in additional revenues in the past five years to pay for essential public services, raised penalties for tax evasion to 200% of tax owed and increased prosecutions five-fold.’