Overview
At the time of this report, the statistics from the Direct effects of illustrative tax changes bulletin are published as official statistics.
The statistics, which are produced by HM Revenue & Customs (HMRC), consist of economic modelling illustrating the predicted financial outcomes of different changes in UK tax rates. The bulletin is intended to provide estimates of how hypothetical changes to UK tax policy would directly affect household incomes and individual liabilities.
Why we did this review
This review was initiated following concerns raised with us regarding a lack of transparency about pre- and post-behavioural estimates. We acknowledge that HMRC publishes only post-behavioural estimates to align with HM Treasury and the Office for Budget Responsibility (OBR) presentations of policy impacts.
Our investigation, against the Code of Practice for Statistics, led to us querying the labelling of this publication as official statistics, since it constitutes economic modelling that is intended for use as a “ready reckoner” resource allowing users to simulate tax changes. Economic models are based on assumptions and forecasts, not observed data, so they do not meet the standards for official statistics. We note that both the Scottish and Welsh tax ready reckoners are not official statistics.
Findings
The statistics are presented clearly and factually, with important context and signposting to other relevant HMRC statistics. There are also links to the Welsh Government rates of income tax ready reckoner and the Scottish Government income tax ready reckoner.
Data are available for over 10 different types of tax, with income tax broken down into rates, allowances, limits and basic rate limits, providing a range of uses to users.
The bulletin provides descriptions of some uncertainties and limitations of the data. These include an explanation that the figures are in line with recent forecasts published by the OBR, and that data aligning with the Autumn Budget 2025 forecast will be included when the publication is updated in the New Year. This explanation emphasises that the estimated impacts are reliant on the forecast and are sensitive to changes in the economic outlook.
The quality report states that the statistics are not within the scope of National Statistics (the former term used for accredited official statistics) due to a ‘certain amount of forecasting’. The report also provides a link to a set of Budget Costing notes, which gives some details of methodologies used and brief descriptions of areas of uncertainty.
Our judgement
Based on our findings, we recommend that HMRC:
- Provide further description of the models used and their accuracy, including an explanation on the scope of the impact of uncertainties arising from the model. It would also be helpful to provide guidance on the appropriate use of the statistics for different circumstances based on their quality and accuracy.
- Provide a more detailed methodology document to support user understanding, outlining how the various data are sourced and the modelling techniques chosen. This document should be separate from the limited information on methodology set out in the quality document. This level of transparency would demonstrate adherence to the Standards for the Public Use of Statistics, Data and Wider Analysis now embedded within the Code of Practice for Statistics 3.0.
- Seek views on the statistics during routine user engagement to understand how the data are being used and to explore opportunities to expand and continually improve the statistics in response to feedback.
- Consider the status of these statistics and whether the label of official statistics should be removed.
Next steps
We will continue to engage with HMRC as it considers whether the current status of these statistics is appropriate. We expect this decision to be reflected in the updated publication released in spring 2026, and for HMRC to implement our recommendations to enhance the quality and value of the statistics.