Understanding tax behaviour

Incentivized Tax Disclosure Schemes

Incentivised Tax Disclosure Schemes: Presentations and Papers

Completed

Income Shifting and Responses to Tax by Company Owner-Managers

There has been substantial growth in the numbers of people who are running their own business, as opposed to being an employee in someone else’s business.

Company owner-managers are particularly responsive to changes in tax rates. For example, they are known to bunch at the higher rate income tax threshold.

In this project we explore the mechanisms that owner-managers use in order to bunch at thresholds. We show that much of the response results from shifts in taxable income across time.

Ongoing

The main part of this project is investigating the characteristics of those with very high incomes over time. It will describe their composition, their characteristics,  and how these have changed over time.  This will also highlight any current or emerging revenue risks and may suggest further avenues for research.

Ongoing

The project investigated the use of tax reliefs, using the anonymised HMRC data sources in the Datalab. The scope of the research focused on the use of pension tax reliefs and other reliefs that reduce income tax liabilities. This documented the use of these reliefs by income level or look at specific kinks or distortions in the tax system (e.g. the Personal Allowance taper at £100,000) to consider the responsiveness to tax reliefs. This was an opportunity to further develop our understanding of one type of taxpayer response to income tax. This could develop into simulation models to provide insight into tax policy changes. 

(See also Discussion Paper 018 - 17)

Completed