There are more than 1,000 tax reliefs in the UK tax system. The NAO has announced that it intends to carry out future work evaluating how these are developed and implemented.

In its initial report announcing the review the NAO examine:

• the landscape of tax reliefs in the UK, how they are used and the risks they carry.
• How the exchequer departments assess the performance of reliefs and respond to emerging differences between their performance and their intended objectives; and
• How the exchequer departments assess, monitor and respond to the risk that reliefs are abused.

Interestingly the report contains the following comment from HM Treasury:

• “ …….The Treasury’s position is that all tax reliefs refl ect policy decisions about the incidence of taxation and distribution of the tax burden, taken by ministers and agreed by Parliament. As such the Treasury’s view is that the design and impact of a relief are questions of policy and therefore outside of the NAO’s remit. The Treasury does not believe this fetters the ability of the NAO to look at the effectiveness of the way in which tax reliefs are administered by HMRC.”

The report is intended to describe the landscape across all tax reliefs in the UK, and to put Parliament in a position to consider whether the major elements in the management and responsiveness of the system are working adequately, or are in need of more focused attention.