Official Statistics

Structural tax relief statistics (December 2023)

Updated 7 December 2023

1. About this publication

‘Structural’ tax reliefs are integral parts of the tax system and have various purposes, such as to define the scope of the tax or calculate income or profits correctly. This publication provides Official Statistics on estimated costs of structural tax reliefs where these are available and lists the structural tax reliefs where estimates are not available and explains why. These estimates provide costs from outturn years 2018 to 2019 up to 2022 to 2023 and forecasts for the current tax year 2023 to 2024.

For a full list of estimated structural reliefs and their associated cost (where available), see the accompanying statistical tables:

• table 1: Estimated cost of structural tax reliefs

• table 2: List of structural tax reliefs where cost estimates are unavailable

Within each table the reliefs are also categorised by the taxes to which they apply, for example, Income Tax and Corporation Tax. Reliefs which apply to more than one tax are in a tab called ‘Multiple tax types’. This publication has been updated to better align with HMRC’s central management of tax reliefs, meaning it focuses on the non-structural tax reliefs.

For more information on ‘non-structural’ reliefs, see the latest non-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.

The figures in this publication are estimates of the amount of relief which is claimed and subsequently granted each tax year in £ million. They do not represent the gain to the Exchequer should a relief be abolished and do not explicitly model additional behavioural responses and wider economic impacts which could result from changes to the reliefs, nor do they consider interactions with other reliefs.

2. Methodology and quality assurance

In December 2023 we published a new accompanying quality and methodology 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, please see accompanying quality and methodology 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 2022 we published a new background quality report for the tax relief statistics.

3. Annex - Revisions since January 2023 publication

Each year the estimates are updated for a number of reasons including:

• new outturn data received into the department from tax returns (for some taxes there can be a substantial delay in taxation, e.g., inheritance tax)

• return data (or other data sources) being received due to the nature of that particular regime

• improvements to methodology behind collecting information or forecasting the estimates

• including the latest OBR economic forecasts in HMRC forecast models where possible

The revisions table below shows the reasons for changes in estimates of structural tax reliefs, which is largely due to incorporation of the latest available data. The following table includes commentary on any large changes in the figures since the previous publication. For our purposes large changes are defined as those greater than £500 million or 25 per cent.

Table 1: Summary of revisions to structural tax relief cost estimates since January 2023

Name	Code	Tax type	Reason for change
Betting and gaming and lottery duties	VAT - S1	VAT	Updated for latest data. There have been revisions to statistical data on consumer expenditure on betting and gaming.
Central Government, Health Authorities and NHS Trusts of VAT incurred on contracted-out services under the Section 41(3) refund scheme	VAT - S3	VAT	Updated for latest data.
Education	VAT - S4	VAT	Updated for latest data.
Finance and insurance	VAT - S5	VAT	Updated for latest data. There have been revisions to statistical data on expenditure in the insurance industry.
Health Services	VAT - S6	VAT	Updated for latest data. There have been revisions to statistical data on consumer expenditure on hospital and in-patient care during the coronavirus pandemic.
Local Authority-type bodies of VAT incurred on non-business purchases under the Section 33 refund scheme (includes academies, museums and galleries under the Section 33A refund scheme)	VAT - S7	VAT	Updated for latest data.
Farming etc averaging of profits	IT - S9	Income Tax	Updated for latest data.
Alternative Property Finance	SDLT - S1	Stamp Duty Land Tax	Updated methodology.
Group Relief	SDLT - S3	Stamp Duty Land Tax	Updated methodology. HMRC has made improvements to the methodology for estimating Stamp Duty Land Tax reliefs, effective from 2021 to 2022 onwards. These have resulted in uplifts to the relief estimate and the relief count. The estimates for previous financial years have been uplifted in proportion to the uplift for 2021 to 2022 and 2022 to 2023, however these estimates will be less reliable. This has increased the relief estimates by an average of £870m per year.
Transfers Involving Multiple Dwellings	SDLT - S11	Stamp Duty Land Tax	Updated methodology. HMRC identified an analytical error in the 2021 to 2022 and previous financial years’ Multiple Dwelling Relief (MDR) count and estimate, which has resulted in the relief count being overestimated and the relief estimate being underestimated. This has been corrected in this publication. HMRC has also improved the data cleansing process for Multiple Dwelling Relief for 2021 to 2022 onwards. The estimates for previous financial years have been uplifted in proportion to the uplift for 2021 to 2022 and 2022 to 2023, however these estimates will be less reliable. This has increased the relief estimates by an average of £170m per year.
Tied oils scheme (Industrial Relief Scheme)	HOD - S1	Hydrocarbon Oil Duties	Updated for latest data. Naphtha demand has significantly fallen in the last two years according to DESNZ DUKES 2023 data. As this makes up a significant proportion of total quantities under the Tied Oils Scheme, total demand for Tied Oils has fallen. This has significantly reduced the cost of relief under the scheme.
Relief for aggregate exported from the UK	AL - S2	Aggregates Levy	Updated for latest data.
Exclusion for fuels used in CHP stations to produce non-electrical outputs	CPF - S2	Carbon Price Floor	Updated for latest data.
Exclusion for fuels used in electricity generation in Northern Ireland	CPF - S3	Carbon Price Floor	Updated for latest data.
Coal, Lignite and Slate	AL - S3	Aggregates Levy	Updated for latest data.
Maternity allowance	IT - S15	Income Tax	Updated for latest data. Updated with two years of outturn data and DWP benefits forecasts.
Personal allowance	IT - S17	Income Tax	Updated for latest data. Using updated OBR determinants and data, likely partially driven by quicker recovery from Covid-19 pandemic than expected, causing difference in determinants for the bases projected from.
Primary Threshold	NIC - S4	NICs	Updated for latest data. Using updated OBR determinants and data, and partially driven by quicker recovery from Covid-19 pandemic than expected, causing difference in determinants for the bases projected from. Cost estimates reflect rate changes mid-year.
Secondary Threshold	NIC - S6	NICs	Updated for latest data. Using updated OBR determinants and data, and partially driven by quicker recovery from Covid-19 pandemic than expected, causing difference in determinants for the bases projected from. Cost estimates reflect rate changes mid-year.
Double Taxation Relief CT	CT - S1	Corporation Tax	Updated for latest data. The changes in the estimates are largely due to the availability of new outturn data for 2021/22. It was previously forecasted that DTR claims would increase by 37% in 2021/22, however the outturn data has shown an increase of only 32%. This lower-than-expected outturn, along with a lower forecasted growth in foreign income (in accordance with the latest OBR determinants) reduces the forecast for 2022/23.
Capital allowances (includes Annual Investment Allowance, Ring-fence oil and gas trade, first-year capital allowances for plant and machinery)	IT_CT - S2	Income Tax and Corporation Tax	Updated for latest data. All years have been updated due to improvements we have made in capturing all capital allowance claims submitted to HMRC, and due to an improved approach to estimate the extent to which capital allowances are used to reduce a profit rather than increase a loss.
Foreign Tax Credits and reliefs under Double Taxation Agreement	IT_CGT - S1	Income Tax and Capital Gains Tax	Updated methodology.
Double taxation relief	IHT - S2	Inheritance Tax	Updated for latest data.
Nil rate band for chargeable transfers not exceeding the threshold for estates left on death	IHT - S4	Inheritance Tax	Updated for latest data.
Loss on sale of land	NA	Inheritance Tax	Updated for latest data.
Loss on sale of shares	NA	Inheritance Tax	Updated for latest data.
Deduction of trading losses against capital gains	CGT - S1	Capital Gains Tax	Updated for latest data.
Tax relief for decommissioning expenditure	PRT - S2	Petroleum Revenue Tax	Updated for latest data. Higher PRT repayment interest now expected for 2022/23.
Homeworkers Allowance	NA	Income Tax	Updated administrative data (claims can be backdated).