In a report published by the Public Accounts Committee (PAC) on Friday, politicians slammed the UK tax office saying that tax reliefs are not visible enough to encourage proper public debate about where the UK chooses not to collect tax.
MPs pointed to analysis by the National Audit Office (NAO) which found that entrepreneurs’ relief was costing three times more than forecast.
The report adds HMRC’s current information on tax relief is scattered across different publications.
“HMRC needs to do more. It should monitor whether the use and cost of tax reliefs is in line with Parliament’s intentions when the reliefs were enacted.
“HMRC still does not provide sufficient information to explain the impact that tax reliefs are having on behaviour,” explained the report.
The PAC highlighted a “number of matters of concern” about the way the organisation collects tax revenues and delivers customer service, including plans to reduce staff in its personal tax service by a third in the next three years.
“It is essential that HMRC avoids repeating the mistakes it made two years ago when it reduced the number of staff in its personal tax service prematurely, resulting in a disastrous decline in customer service,” said the report.
“We remain concerned that HMRC does not scrutinise effectively whether tax reliefs are being used as intended or provide parliament with sufficient information on the costs of tax reliefs and their effectiveness.”
