Government needs to overhaul tax relief system, say MPs

Almost £200bn of tax reliefs handed to businesses and individuals each year should come under greater government scrutiny to prevent fraud and abuse, according to a report by the Treasury committee. The report calls for a systematic review of over 1,000 tax reliefs, highlighting the lack of resources at HM Revenue and Customs to monitor their usage. Harriett Baldwin, a Tory MP and the chair of the committee, said: “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. The committee argues that the tax system has become too complicated and urges HMRC to work with the Treasury to address the complexity and potential for abuse. The report also reveals that tax reliefs primarily benefit higher-rate taxpayers, with low earners missing out. The committee recommends reclassifying tax reliefs as government spending and implementing five-yearly reviews to remove reliefs that no longer achieve policy objectives or are vulnerable to abuse

 

Daily Telegraph

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