Tax and benefit system – Institute For Fiscal Studies

Since its inception in the 1960s, the IFS has studied the design of the UK tax and benefit system, and its effects on individuals and businesses. This continues to be an essential part of the Institute’s work. We continuously monitor and analyze policy developments and proposals and use this work to make important contributions to public debates. Each year, as the budget approaches, we publish our own Green Budget, which addresses the challenges facing the Chancellor, and we publish an analysis of policy changes immediately following the budget and budget statements. More recently, we have also started supporting tax policy analysis in developing countries, notably through our TaxDev initiative.

To ensure that our analysis is relevant and impactful, we are constantly maintaining and improving the Institute’s tax and benefit model. We use it, in conjunction with large cross-sectional household datasets, to model the impact of reforms on individuals’ incomes and behavior. As a public resource, we maintain surveys of the tax and benefit system and provide data on rates and allowances.

Our policy work is underpinned by academic research. IFS research has made major contributions to understanding how taxes and benefits affect choices – including the duration of work, education and investment in skills – and how the tax system and Benefits provides insurance throughout people’s lives. IFS researchers have also made important contributions to how corporate taxation affects where companies locate production and hold intellectual property.

Decades of tax and benefit research, together with the expertise of IFS’s vast network of researchers and fellows, have been brought together for the Mirrlees Review. This project identified the characteristics of a good tax system for any developed open economy, assessed how well the UK tax system is in line with these ideals, and recommended how it could realistically be reformed in this direction. The review produced a series of chapters dealing with specific aspects of the tax system and a final volume that sets out conclusions on how to design the system as a whole.

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