Official Statistics

Background quality report: Tax relief statistics

Updated 5 December 2024

1. Introduction

This quality report relates to Official Statistics on the estimated costs of tax reliefs. The purpose is to provide users with information about the quality of the outputs as set out by the Code of Practice for Official Statistics.

Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to. You are welcome to contact us directly with any comments about how we meet these standards by emailing taxreliefstatistics@hmrc.gov.uk. Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

This is a bi-annual release, with the spring release covering only additional cost estimates for non-structural reliefs where they were previously not available. The autumn release covers both structural and non-structural reliefs and provides the estimated costs of tax reliefs where these are available and lists a subset of the tax reliefs where estimates are not available.

The bulletin is produced by analysts in the Knowledge Analysis and Intelligence (KAI) directorate of HM Revenue and Customs (HMRC). Thorough quality assurance (QA) procedures are followed for each bulletin before it is signed off by senior management, then sent to the HMRC GOV.UK communications team for publication.

2. Official Statistics in Development

Some of the statistics within the HMRC tax relief statistics collection are official statistics in development. Official statistics in development are official statistics that are undergoing development. They were previously called ‘experimental statistics’. These are published in the Spring, most recently, the May 2024 statistical release. All other statistics within the collection, published in the Autumn, are Official Statistics. Most recently they can be found in the December 2023 publication.

These official statistics in development form part of a multi-year project to provide more public information on the costs for reliefs where none are currently published. This project started in 2019 and will run in two stages over several years. These statistics will remain under the “official statistics in development” label for the duration of this project, after which the type of statistics will be reassessed .

Due to data limitations, single-year cost estimates have a higher average degree of uncertainty than in the other statistical publications in the HMRC tax relief statistics collection. As a result, each estimate has been given an uncertainty rating. Where the cost of a relief cannot be reliably estimated, we will publish these as ‘unable to cost’ along with a reason. A list of these reasons and uncertainty ratings can be found in the accompanying quality and methodology information report.

We 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.

3. Relevance

The publication of tax relief statistics is part of a multi-year project, beginning in 2019, to improve public understanding of the cost of the tax reliefs. Prior to this, HMRC published information on the cost of reliefs but were advised by the Public Accounts Committee in July 2020 to expand coverage on reliefs, where previously not available and their beneficiaries. Since 2019 HMRC has continued to develop the publication and reports back to the committee on progress.

Respondents can also feedback or query the statistics by emailing the following address: taxreliefsstatistics@hmrc.gov.uk

4. Accuracy and reliability

These figures should be interpreted as estimates of the amount of relief which is claimed and subsequently granted each year. These estimates do not represent the gain to the exchequer should a relief be abolished. All costs are on an accruals basis in that they represent the effects on the tax liabilities for each year, not receipts in each year.

We are committed to continuously improving the official statistics we publish. Checks are conducted and a quality assurance review process with a clear audit trail is in place to minimise the risk of error.

Each relief costing undergoes its own QA process, which will help validate the accuracy of estimates. However, in many cases relevant data is not directly available and so we have had to rely on proxy data and/or make assumptions. Thus, there will be a degree of uncertainty surrounding each estimate, to which we have assigned an uncertainty level based on the quality of the data and the assumptions made.

More information can be found in the accompanying quality and methodology information report.

5. Accessibility and clarity

The data is publicly available within the Tax reliefs statistics collection and is published at 9.30 am on the pre-announced date of release. Several changes were made to the collection in 2021 to make it more accessible to members of the public:

• replacement of Portable Document Format (PDF) files previously used for statistics commentary with HTML documents
• migration of data tables from Microsoft Excel to ODS format
• reorganising outputs to improve clarity and readability

6. Coherence and comparability

Coherence is the degree to which data that are derived from different sources or methods, but refer to the same topic, are similar. Comparability is the degree to which data can be compared over time and domain.

Where possible we attempt to compare estimates with publicly available sources to establish their validity. However, it many cases this is not possible, particularly where we do not request this information from taxpayers to establish the tax liability. For costings which rely on administrative data, there are no other sources that allow a comparison with the data in the bulletin (since HMRC is the only organisation which collects this information).

Comparing estimates between publications could be misleading as changes to policy, modelling methodologies, data, and assumptions mean that estimates could be calculated on a different basis year to year. Data within the bulletin relates to the UK as a whole and cannot be disaggregated into lower geographical breakdowns. Archive versions of the publication are no longer hosted on GOV.UK and are instead available via the UK Government Web Archive, from the National Archives.

7. Trade-offs between output quality components

The quality of data available for each cost estimate varies, therefore some estimates are more uncertain than other. In many cases, relevant data is not directly available and so we have used proxy data and/or made assumptions. As a result, we have provided an uncertainty rating with each cost estimate. Our assessment of the uncertainty level is broad-based and considers the quality of the data used and the assumptions made.

8. Assessment of user needs and perceptions

Recommendations from the Public Accounts Committee in July 2020 have been a key driver of changes to the publication. HMRC has committed to ‘improving the available information about the groups and sectors benefitting from significant reliefs’, and to ‘identify and explain significant cost variances within reliefs’.

HMRC has improved the available information on the estimated costs of tax reliefs and their beneficiaries within the publication and reports back to the Public Accounts Committee on progress against these recommendations. Respondents can also feedback or query the statistics by emailing the following address: taxreliefsstatistics@hmrc.gov.uk

9. Performance, cost and respondent burden

Analytical resource has been deployed 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. There is no respondent burden since data is taken from either administrative sources, which are used by taxpayers to make their usual returns to HMRC or public available external data.

10. Confidentiality, transparency and security

The data is aggregated and statistical rules are provided to make sure figures are not disclosive. HMRC complies with the Code of Practice.