A 65-page NAO study, Tax Reliefs, looking at the UK’s tax landscape, revealed there were 1,128 different tax reliefs available to individuals and businesses as of March 2013.
It found that some reliefs, were often used as an alternative to public expenditure by the government as a tool of redistributing wealth, with a yearly cost of approximately £100bn.
However, the NAO study also conceded that few evaluations of the tax relief system had been commissioned, leading to a lack of information about whether some were being misused, while just 180 had their costs estimated by HMRC. Comptroller and auditor general Amyas Morse said the NAO intended to carry out research into how tax reliefs were developed.
Mark Simpson, tax strategy partner at national law firm Squire Sanders, said: “Tax reliefs are complex and very hard to monitor, so it’s useful that the NAO is looking into it.”
Adviser view
Mike Pendergast, IFA for Cheshire-based Zen Financial Services, said: “There can be a lot of tax relief that clients don’t know about. All we as advisers can do is look at all the options, but it can be quite a difficult process.”
