Earlier this year, the House of Commons Treasury Committee issued a report highlighting the complexity of the tax system, focusing on tax reliefs. The Committee recommended a comprehensive and systematic review of existing tax reliefs to look for opportunities for simplification, publication of full costings of all tax reliefs, and five-year reviews of individual tax reliefs, with a commitment to remove those reliefs that no longer serve their policy goal or are vulnerable to abuse.
The Treasury has just published its response* to the Committee report stating that:
- A full review of all tax reliefs would impose significant uncertainty on the tax system, putting revenue at risk and altering business behaviour whilst they waited for such a review to conclude
- Constant reviews would essentially be creating uncertainty for taxpayers. This would particularly impact businesses
- Costing all tax reliefs is not possible without collecting significant additional data from taxpayers
- Any regular time-based assessment of whether reliefs should continue to exist creates inherent instability and uncertainty
*Tax Reliefs: Government Response to the Committee’s Twentieth Report – DOWNLOAD
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