HMRC

PAC tackles lack of HMT and HMRC environmental tax strategies

In a recent report, MPs claimed that the bodies have a ‘very limited view of the role of tax’

The Public Accounts Committee (PAC) has criticised HM Treasury and HMRC over their lack of environment tax strategies.

In a recent report, MPs claimed that the bodies have a “very limited view of the role of tax”, and were unable to explain to the committee “how the tax system is used in achieving the government’s environmental goals”.

The PAC said that although there is a narrow “focus on the revenue taxes raised”, there is yet to be a “plan for the impact of the government’s environmental ambitions on tax revenues”.

The government has set a UK net zero target by 2050, but the PAC alleged that the Treasury is still considering how tax should fit within a comprehensive programme to fund the achievement.

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The PAC used a £28bn fuel duty raise set in 2019-20 as an example of outdated plans that will not support the government’s climate goals, as more people switch to electric vehicles and fuel tax revenues dwindle.

Meg Hillier, chair of the PAC, said: “The UK government has been blithely issuing ever more ambitious climate targets for years now, with no sign of a roadmap to reach any of them. 

“The departments in charge seem stuck in a bygone era, with little sign of the innovative thinking needed to achieve all this.”

She added: “Now we are six months from hosting the next major global climate summit and the climate storm is breaking all around us. HMRC and HMT need to catch up fast.”

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