The provision of a research project into Multiple Dwellings Relief Evaluation

This is a KAI Social Research contract intended to be let through Research Marketplace to evaluate MDR.

In February 2020, the National Audit Office (NAO) published a report regarding HMRC tax reliefs. In particular, the report focused on non-structural tax reliefs, in which HMRC opt not to collect tax in order to pursue social or economic objectives. This report contained several recommendations for assessing and monitoring the performance of these tax reliefs, including the need for HMRC to 'develop a robust methodology to assess the value for money of different types of tax expenditures' and a 'systematic approach to the evaluation of tax expenditures'.

In response to the NAO's recommendation, we developed a tax relief evaluation programme. The proposed programme focuses on the costliest non-structural reliefs with a behavioural element and other reliefs of this nature that have seen big changes in cost or profile. This current evaluation focuses on the MDR. This is a relief that can be claimed when someone buys more than one dwelling or where a transaction or a number of linked transactions include freehold or leasehold interests in more than one dwelling. MDR has recently been recosted, this recosting suggests the value of the relief is significantly higher than originally anticipated and therefore, it has been considered high priority for evaluation.

The process described here will draw upon external expertise to develop and conduct a robust project for meeting these recommendations in evaluating the schemes. In order to fulfill this goal, contractors will be asked to:

• a)Develop a detailed and appropriate proposal for conducting this evaluation. We expect this to include econometrics, quantitative research and qualitative research;
• b)Work closely with project leads at HMRC and HMT to deliver high-quality evaluation at pace, including recruitment, data collection and analysis; and
• c)Provide a detailed final report of analytic findings answering a range of evaluation aims and questions which have been agreed with HMRC and HMT project leads in advance at the beginning of the project.

The purpose of this evaluation is to conduct a rigorous assessment of the schemes in terms of both social and economic impact, providing insight into the effectiveness of high-cost tax reliefs that HMRC offers. Not completing this evaluation of the schemes may put HMRC at risk of public criticism for not proactively responding to the NAO's recommendations.