Tax relief statistics - additional cost estimates (May 2024)
Updated 5 December 2024
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This publication is available at https://www.gov.uk/government/statistics/main-tax-expenditures-and-structural-reliefs/tax-relief-statistics-additional-cost-estimates-may-2024
Coverage: United Kingdom
Theme: The Economy
Release: 16 May 2024
Next Release: Autumn 2024
Frequency of Release: Bi-annual
Media Contact: [email protected]
Statistical Contact: I Argüelles Martínez, [email protected]
Website: Tax relief statistics
1. About this publication
‘Non-structural’ tax reliefs are those reliefs designed to help or encourage particular types of individuals, activities or products in order to achieve economic or social objectives. This publication sets out new information on the costs of non-structural tax reliefs where the cost had previously been unavailable. It provides single-year cost estimates for 5 non-structural tax reliefs and notes 1 reliefs where there is insufficient data to provide estimates.
This publication has the ‘official statistics in development’ label. Official statistics in development are official statistics that are undergoing development. They were previously called ‘experimental statistics’. More information is available in the accompanying background quality report.
The figures in this publication are estimates of the amount of relief which is claimed and subsequently granted each tax year. They do not represent the gain to the Exchequer should a relief be abolished and do not explicitly model behavioural responses and wider economic impacts which could result from changes to the reliefs, nor do they consider interactions with other reliefs.
Due to data limitations, cost estimates in this publication have a higher average degree of uncertainty than in the other statistical publications in the HMRC Annual Tax Relief Statistics release. As a result, each estimate has been given an uncertainty rating.
These reliefs are listed in the download table accompanying this bulletin and in the results section.
This bulletin does not cover ‘structural reliefs’. For more information on ‘structural’ reliefs, see the latest structural reliefs publication. For more information on the difference between structural and non-structural reliefs as well as further detail on the methodology used for this release, see the accompanying quality and methodology information report.
2. Results
2.1 Single-year cost estimates (figures given in £ millions):
| Name | Tax type | Year | Cost estimate | Uncertainty rating |
|---|---|---|---|---|
| Acquisition by a house-building company from an individual acquiring a new dwelling from the house-building company | Stamp Duty Land Tax | 2022 to 2023 | 25 | Medium |
| Termination of employment - foreign service | Income Tax | 2021 to 2022 | Negligible | Medium |
| Capital allowances - mining and oil industries | Income Tax and Corporation Tax | 2020 to 2021 | Negligible | High |
| Exemption from National Insurance contributions for COVID-19 Test and Trace Support Payments (England) | NICs | 2021 to 2022 | Negligible | Medium |
| Exemption from National Insurance contributions for COVID-19 Test and Trace Support Payments for Scotland and Wales | NICs | 2021 to 2022 | Negligible | Medium |
| Ring Fence Expenditure Supplement (RFES) | Corporation Tax | Not applicable | Unable to estimate cost | NA |
The associated download table published with this bulletin also provides additional information on each relief. Reliefs that apply to more than one tax will be listed in the ‘Multiple tax types’ tab of the download table.
3. Progress against external recommendations
HMRC continuously aims to improve its own, and public understanding of the impacts of tax reliefs. HMRC has prioritised additional analytical resource to undertake a multi-year project to provide more public information on the costs for reliefs where none are currently published, prioritising non-structural reliefs. This project started in 2019 and will run in two stages over several years.
The first stage involves a comprehensive review of currently available data to provide indicative estimates for the cost of tax reliefs. A full break-down of the progress can be found in table 1. In total, including this publication, we have published 157 new cost estimates for non-structural reliefs since 2020. We will continue to expand coverage in 2024.
Table 1: Progress on costing previously uncosted reliefs since 2020
| Publication | Cost estimate | Unable to estimate cost | Cost estimate withheld due to dominance and disclosure rules | Total |
|---|---|---|---|---|
| May 2020 | 45 | 2 | 0 | 47 |
| October 2020 | 26 | 3 | 11 | 40 |
| May 2021 | 29 | 4 | 12 | 45 |
| December 2021 | 17 | 5 | 2 | 24 |
| May 2022 | 15 | 5 | 0 | 20 |
| January 2023 | 10 | 3 | 1 | 14 |
| May 2023 | 5 | 0 | 1 | 6 |
| December 2023 | 5 | 0 | 0 | 5 |
| May 2024 | 5 | 1 | 0 | 6 |
| Total | 157 | 23 | 27 | 207 |
Of the total 341 non-structural reliefs, after this publication, only 80 do not have an associated cost. Of these 80, an estimate has not been provided for the following reasons:
- Revealing the estimate could potentially disclose confidential information (27)
- We are currently unable to estimate the cost (23, see the accompanying quality and methodology information report for reasons)
- The relief has not yet been investigated (26)
- The relief cost estimate has been temporarily withdrawn due to data quality issues (4, see accompanying quality and methodology information report)
Therefore, as a result of this programme of work, only 26 non-structural reliefs have not been investigated out of a total of 341.
The previous release from December 2023 included:
- multi-year cost estimates for structural reliefs
- multi and single-year cost estimates for non-structural reliefs (including all cost estimates for previously uncosted reliefs published up to December 2023)
- lists of tax reliefs where cost estimates are unavailable for:
The multi-year cost estimates provide costs from outturn years 2018 to 2019 up to 2022 to 2023 and forecasts for the tax year 2023 to 2024. Single-year cost estimates are given for the latest year that data was available when the costing was undertaken.
4. Methodology and data quality
In December 2023 we published a new methodology and quality information report for all tax reliefs statistics (structural and non-structural). For information on the data and methods used to produce estimates within this bulletin and the accompanying statistical tables, see the accompanying methodology and quality information report.
We are committed to continuously improving the Official Statistics we publish. A panel, led by senior HMRC analysts, was set up in 2018 to review the methodology of reliefs on a rolling basis. Our quality assurance processes were reviewed in October 2020 and we have in place checks to minimise the risk of error and a rigorous quality assurance review process. The publication is also peer-reviewed by different team members and overseen by senior analysts including the team’s senior statistician.
In May 2024 we published a new background quality report for the tax relief statistics, following the recent Office for Statistics Regulation designation review.
5. User Engagement and Future Development
We welcome users’ views, therefore if you have any comments on this publication please get in touch using the statistical contacts provided at the top of this bulletin. We also invite users to provide us with any data they hold which could help us to estimate the cost of any of the uncosted non-structural tax reliefs listed in the December 2023 publication.
HMRC aims to continuously improve its understanding of the cost of tax reliefs. This is the ninth publication that reports on new cost estimates as part of a project to provide more information on previously uncosted reliefs. Analytical resource has been prioritised to cost non-structural reliefs. We have considered a range of criteria in prioritising within the non-structural reliefs, including size, complexity, data availability and available resourcing.
We plan to add cost estimates for further tax reliefs and will continue to expand coverage over the next 12 months. In the medium-term, HMRC will continue to review and improve the tax relief statistics collection. We published the first set of new single-year cost estimates within the established annual tax relief statistics publication in October 2020.
This publication has been produced as part of the first stage of the tax reliefs costing project, which involves a comprehensive review of currently available data to provide indicative estimates for tax reliefs. We will continue to progress this stage of the project over the course of 2024. As we are nearing the end of the first stage of the project, the remaining estimates have a higher level of uncertainty given the limited data available to cost them.
The second stage of the project identifies those reliefs where HMRC would need to collect or purchase additional data to estimate the costs of the reliefs, and HMRC and HM Treasury will weigh the costs of acquiring data against the benefits of generating further estimates.
We are also in the process of reconsidering the purpose and content of the Spring official statistics in development publication to make sure that it provides our users with added value. We would welcome feedback on any developments that could be of interest.