Think tank calls for tax relief reform

A think tank has urged the Government to carry out a radical reform of tax reliefs, to tackle intergenerational unfairness.

Research published by Bright Blue recommended creating a new Office for Fiscal Responsibility, which would pursue tax simplification and examine the effectiveness of all tax reliefs.

This would replace the existing Office for Tax Simplification (OTS), and would review each tax relief after five years.

The most recent records from the OTS showed there were a total of 1,156 tax reliefs in 2015, and HMRC expects these to cost more than £425 billion in 2018/19 - roughly half of expected tax revenues for 2019/20.

Bright Blue says that Parliament has "little insight" into whether the reliefs are working as intended, and whether they represent good value for money.

It argued that tax reliefs and other "unfunded spending promises" by the Government will result in costs being passed on to younger generations, unless major policy changes are made.

Nicky Morgan, chairman of the Treasury Select Committee, said:

"Growing intergenerational inequality in Britain is now well-documented and widely discussed.

"It is time that politicians address it, not least by exerting tighter control on public spending. This will reduce the risk that future generations will face excessive tax rises or cuts to public services."

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