Tax-benefit models are used to answer ‘what if’ questions about the effects of specific tax and benefit reforms on household incomes. This project aims to meet the demand for tax-benefit modelling capacity among UK organisations (and individuals) and to promote its use more widely as a way to improve the evidence base to better inform current policy debates.

Tax-benefit models use survey data as the basis on which to model the impact and costs of proposed changes to the tax and benefit system, arithmetic calculations are carried out for each household in a dataset and the first order effects on the overall public budget, across the distribution of income and by household characteristics are obtained. There are a number of tax-benefit models that are regularly maintained and updated in the UK, but they are not widely available to use and require specialist skills. The exception is the UK component of EUROMOD. This project will consolidate UKMOD as a reliable, flexible, accessible and transparent tax-benefit model and will adapt and extend it to increase its relevance for UK policy analysis. It will also develop a simplified approach to using selected parts of the model by non-expert users.

Specific developments include: