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

Related Post

IR35 rules fuel crisis in self-employment It has been suggested that HMRC’s battles with BBC stars over the controversial IR35 rules have contributed to a crisis in self-employment. A survey by the Association of Independent Professionals and the Self-Employed (IPSE) found that one in ten highly skilled freelancers is currently out of work due to the IR35 reforms. More than half […] By yinka developer, 10 April 2024
Read Now
Income tax hits £264bn under the Tories Analysis of HMRC data shows that income tax revenues have increased by more than 70% under successive Conservative administrations, hitting £264bn. Then-Chancellor Rishi Sunak froze a number of tax bands in 2021 and since the policy was enacted, income tax receipts have jumped by £49bn. Since 2010, when the Tories took power via a coalition […] By Lisa Brownlow, 10 January 2024
Read Now
HMRC allowed 11,000 Chinese firms to register at one flat The head of HM Revenue & Customs has admitted to the Commons Public Accounts Committee, that it allowed 11,000 Chinese firms to register for VAT at a single residential flat in Wales without checking who lived there. Jim Harra, permanent secretary at HMRC, revealed over 2,350 of the companies that were registered at the address […] By Lisa Brownlow, 27 April 2023
Read Now
↑