Tax-benefit microsimulation models are used to answer “what if” questions about the effects of tax and benefit reforms on household incomes and the income distribution. Such analysis is regularly performed for Budget and other Government policy announcements and is also highly relevant for the design of alternative reforms and new policy instruments.

What is tax-benefit microsimulation?

What is UKMOD?

Why use UKMOD?

Key strengths of the model include:

  • The only accessible model for the UK
  • Comparability with the EUROMOD EU-27 model
  • Highly flexible policy settings
  • Intuitive user interface
  • Special-purpose tax-benefit modelling language
  • Extensive library of policies
  • Continually updated and developed

How does UKMOD work?

UKMOD applies user-defined tax and benefit policy rules to harmonised microdata on individuals and households, calculates the effects of these rules on household income, and then outputs results – still at the micro level.

The user interface can output a range of summary statistics, including (changes to) risk-of-poverty and income inequality and the (net) budgetary cost of policy changes.