The Government believes that tax reliefs are an important part of the tax system and play a significant role in defining the scope of tax. In particular they can help create a fairer, simpler system which reflects the needs of a wide range of individuals and businesses.
The government outlines the rationale for, and expected impacts of, any tax policy changes, including new tax reliefs, in published Tax Information and Impact Notes (TIINs). TIINs also set out the government’s intentions with regard to monitoring and evaluating tax measures.
While tax reliefs can be used to pursue specific policy objectives, all reliefs reflect policy choices about the distribution of the tax burden, proposed by the government and agreed by Parliament.
The government is transparent about both the costs of existing reliefs and the costs and likely impacts of new reliefs. HMRC annually publishes information on the Exchequer cost of around 180 existing tax reliefs on its website. The independent Office for Budget Responsibility certifies the cost of all new tax reliefs or changes to existing reliefs.