FIGURES published by HM Revenue & Customs reveal that the cost of UK tax breaks has risen by 13% to £117bn, with the main cause attributed to the exemption of properties from capital gains tax.
The tax authority reveals that the cost of excusing main properties from capital gains tax has risen from £10.5bn to £18bn in the four years leading to 2015-16.
VAT relief for housebuilders has increased over the same period from £7.5bn to £11.4bn. Entrepreneurs’ relief has swollen from £2bn to £3bn, while R&D tax credits has also increased from £1.4bn to £2bn. The total tax break costs do not include the £1bn figure for minor reliefs and 218 tax reliefs where the costs are at present unavailable.
These figures may add fuel to the fire for politicians who have previously called for a review into tax reliefs.
Seema Malhotra, shadow chief secretary to the Treasury, previously accused George Osborne of being “remarkably uninterested in whether business tax reliefs are effective or efficient”.
“We should ask if the current regime is well targeted, whether behaviour really shifts or under what circumstances we may be rewarding investments that would take place anyway,” said Malhotra.
Companies must report on their complex financial structures including offshore accounts and notify HMRC
An examination by the Public Accounts Committee (PAC) has revealed serious concerns relating to HMRC’s plans
Andrew Tyrie suggests there will not be enough time to implement Making Tax Digital (MTD) by April 2018
The ACCA has announced a partnership with UK research and development tax reclaim specialist RD Tax Solutions