Research and analysis
Evaluation of the Employment Allowance
HM Revenue and Customs commissioned Ipsos to evaluate the Employment Allowance.
Documents
Details
HM Revenue and Customs commissioned Ipsos to undertake a thorough and independent evaluation of the impact of the Employment Allowance. The research was conducted in 2022, prior to the changes to Employment Allowance which came into force in April 2025.
The research comprised 3 strands:
- a telephone survey of 1,264 employers (including 655 claimants, 104 previously eligible claimants, 402 non-claimants, and 100 past claimants, conducted between 30 May and 28 July 2022)
- econometric analysis to establish the causal effects of the Employment Allowance on the key outcomes of interest
- 20 in-depth, semi-structured interviews (including 8 claimant interviews, 6 past claimants/previously eligible claimant interviews and 6 non-claimant interviews, conducted between 10 August and 1 September 2022)
The evaluation aimed to:
- assess whether the Employment Allowance is helping organisations that wish to grow with the cost of employment
- assess whether the relief is encouraging business growth and overall levels of UK employment
- identify the direct and indirect effects of the Employment Allowance on the labour market
- explore whether the Employment Allowance is appropriate (i.e. whether other forms of support would have been better)
- establish if the Employment Allowance is proportionate
- assess whether the relief generates wider economic impacts
- understand the impact of the Employment Allowance during the COVID-19 pandemic
- provide a useful evidence base to review the policy and inform decisions on future improvements
The views in this report are the authors’ own and do not necessarily reflect those of HMRC.
Updates to this page
Published 28 May 2025