Official Statistics

Background Quality Report: Direct effects of illustrative tax changes

Updated 23 January 2024

1. Background Quality Report: Direct effects of illustrative changes

Dimension	Assessment by the author
Introduction	Context for the quality report. The publication is a ‘ready reckoner’ and estimates the effects on tax revenues of a variety of tax changes on an indexed basis: - for Income Tax, Corporation Tax, Capital Gains Tax, Inheritance Tax and National Insurance Contribution’s from the financial year after publication - the effects of a 1% or one percentage point change in indirect taxes (VAT, stamp duties etc) from the financial year after publication Tax changes are shown on an indexed basis, which means they assume a baseline of thresholds, allowances and, where relevant, tax rates going up by inflation each year. The baseline also takes into account any announced changes to tax policy. Estimates start by considering the static costing, which is the revenue raised from the whole of the affected population, without consideration of the actions that population may take to minimise or maximise the effects of the change on them. Most estimates include adjustments for behaviours, with the exception of Inheritance Tax, Vehicle Excise Duty & Child Benefit.
Relevance	The degree to which the statistical product meets user needs in both coverage and content. The figures presented in this table are estimated using methodology as described in the Budget Costing notes. More details of indexation and the methodology used for certain allowances, thresholds and rate changes are available in the Budget policy costings publications. The latest one is available here: Budget Costings publication
Accuracy and Reliability	The proximity between an estimate and the unknown true value. These statistics do not fall within the scope of National Statistics due to a certain amount of forecasting. However, our costing methodologies are reviewed routinely by the Office for Budget Responsibility.
Timeliness and Punctuality	Timeliness refers to the time gap between publication and the reference period. Punctuality refers to the gap between planned and actual publication dates. These statistics are published bi-annually to a pre-announced timetable following any fiscal events, and in line with the Code of Practice for Statistics. They are published at 09:30 on the pre-announced date. National and Official Statistics - Scheduled updates
Accessibility and Clarity	Accessibility is the ease with which users are able to access the data, also reflecting the format in which the data are available and the availability of supporting information. Clarity refers to the quality and sufficiency of the metadata, illustrations and accompanying advice. The Tax expenditures and ready reckoners publication is available on the gov.uk website. It is free to access for all users and contains contact details for further information. The publication consists of a summary table showing costings of a range of incremental tax changes, along with accompanying notes where applicable.
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. The tables are updated after each fiscal event. Archived tables can be accessed through The National Archives.
Trade-offs between Output Quality Components	Trade-offs are the extent to which different aspects of quality are balanced against each other. The costings in the publication are uncertain, as the estimates include assumptions and forecasted elements, which put them outside of the scope of National Statistics. However, the base costings are reviewed by the Office of Budget Responsibility.
Assessment of User Needs and Perceptions	The processes for finding out about users and uses, and their views on the statistical products. Contact details are provided in the publication. Any feedback is reviewed and consideration given to how it can be actioned in future publications.
Performance, Cost and Respondent Burden	The effectiveness, efficiency and economy of the statistical output. The models and underlying methodology behind these estimates are routinely used as part of the Budget forecasting and policy costing processes for HM Treasury and the Office of Budget Responsibility. Publication therefore represents a relatively small burden. There is no respondent burden.
Confidentiality, Transparency and Security	The procedures and policy used to ensure sound confidentiality, security and transparent practices. This data is aggregated and is not disclosive. The estimates are based on costings as described in the Budget Policy costings publication. This document reflects the Government’s commitment to increase transparency around the public Finances. The methodology behind each costing is described in this publication.