Treasury committee opens inquiry into tax reliefs

Treasury committee opens inquiry into tax reliefs
(Pexels/Nataliya Vaitkevich)

The Treasury committee has asked for views on whether the current suite of personal and business tax reliefs provide benefits to the economy.

In a statement last week (July 22), the cross-party group of MPs called for feedback on the impact of these reliefs on employment, investment and growth in the UK.

The group also asked for stakeholders to submit evidence on whether reliefs are being used in the way in which they were intended, as well as if they cause any problems to the tax system (for instance through tax evasion or avoidance).

International comparisons are encouraged, the committee said, as are thoughts on potential reforms to the system of tax reliefs. 

Questions the committee has asked include do “cliff edges” in the structure of tax reliefs lead to problem for taxpayers, businesses or for the wider economy, as well as what problems do tax reliefs cause.

Chair of the Treasury committee, Mel Stride, said: “Tax reliefs can play an important role in promoting investment, creating employment, and generating growth. 

“[We are investigating] whether tax reliefs benefit the UK’s economy and if they provide good value for money for taxpayers. We are also interested in any problems they may cause for the tax system, and the scope for reform.”

The deadline for submissions is September 19.

The review comes amid the Tory leadership campaign, in which tax policy has become a leading topic.

The two remaining candidates in the race, Rishi Sunak and Liz Truss, have mainly opposing views on tax policies.

Sunak has previously said although he is a supporter of tax cuts, he will only enact them once inflation is under control.

Truss, on the other hand, has committed to cutting the increases in national insurance through the social care levy, as well as corporation tax.

She has said this will push inflation down, which opposed the consensus view of economists.