UK Treasury rejects call to evaluate pension tax reliefs

Now is not the right time for a formal evaluation of pension tax reliefs, the UK government said in response to a report calling for a “step change” in the administration and understanding of reliefs.

HM Revenue & Customs does not understand the impact of “any of the largest tax reliefs, including reliefs on pensions which were forecast to cost £38 billion in 2018-19″, the House of Commons Public Accounts Committee said in July. The government “has not made any assessment of whether that huge cost actually encourages saving for retirement or reduces dependence on state retirement benefits, or whether it just enables those already saving comfortably to save more”, the committee argued.

There are “vast amounts of tax forgone” through reliefs, Mel Stride, Treasury Committee chair and Conservative member of Parliament, said in July, as he launched an inquiry into “tax after coronavirus”. But the committee has said it will consider the role of reliefs in rebuilding the economy after COVID-19. The inquiry has invited written evidence by December 7.

My news story for Tax Notes (paywall) published on September 29 is reproduced here, with permission.

Tolley’s Tax Digest: Tax compliance update

Tolley published in August my fourth tax compliance update since 2016. This 42-page digest draws together and summarises recent tax compliance-related legislation and guidance, and includes:

  • summaries of the key compliance-related draft clauses for Finance Bill 2021 and the government’s proposed reform of tax administration;
  • details of the new regime for taxation and recovery of coronavirus support payments, and an overview of the legal framework for the support schemes; and
  • the current status of more than 20 tax compliance-related consultations, including those announced on ‘L-day’ in July.