PolicyEngine-UK 2.1.1__tar.gz → 2.3.0__tar.gz

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/CHANGELOG.md

@@ -5,6 +5,18 @@ All notable changes to this project will be documented in this file.
 The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/), 
 and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 
+## [2.3.0] - 2024-10-17 10:47:06
+
+### Changed
+
+- UK-data bumped to 1.5.
+
+## [2.2.0] - 2024-10-16 11:52:07
+
+### Fixed
+
+- Add employer NI incidence.
+
 ## [2.1.1] - 2024-09-18 11:12:23
 
 ## [2.1.0] - 2024-09-18 11:04:12
@@ -1488,6 +1500,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 
 
+[2.3.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.2.0...2.3.0
+[2.2.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.1.1...2.2.0
 [2.1.1]: https://github.com/PolicyEngine/openfisca-uk/compare/2.1.0...2.1.1
 [2.1.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.0.0...2.1.0
 [2.0.0]: https://github.com/PolicyEngine/openfisca-uk/compare/1.8.0...2.0.0

{PolicyEngine-UK-2.1.1/PolicyEngine_UK.egg-info → PolicyEngine-UK-2.3.0}/PKG-INFO

@@ -1,6 +1,6 @@
 Metadata-Version: 2.1
 Name: PolicyEngine-UK
-Version: 2.1.1
+Version: 2.3.0
 Summary: PolicyEngine tax and benefit system for the UK
 Home-page: https://github.com/PolicyEngine/policyengine-uk
 Author: PolicyEngine

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0/PolicyEngine_UK.egg-info}/PKG-INFO

@@ -1,6 +1,6 @@
 Metadata-Version: 2.1
 Name: PolicyEngine-UK
-Version: 2.1.1
+Version: 2.3.0
 Summary: PolicyEngine tax and benefit system for the UK
 Home-page: https://github.com/PolicyEngine/policyengine-uk
 Author: PolicyEngine

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/PolicyEngine_UK.egg-info/SOURCES.txt

@@ -122,6 +122,9 @@ policyengine_uk/parameters/gov/contrib/policyengine/economy/gdp_per_capita.yaml
 policyengine_uk/parameters/gov/contrib/policyengine/economy/interest_rates.yaml
 policyengine_uk/parameters/gov/contrib/policyengine/economy/rent.yaml
 policyengine_uk/parameters/gov/contrib/policyengine/economy/transport.yaml
+policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/README.md
+policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/employee_incidence.yaml
+policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/exempt_employer_pension_contributions.yaml
 policyengine_uk/parameters/gov/contrib/ubi_center/README.md
 policyengine_uk/parameters/gov/contrib/ubi_center/carbon_tax.yaml
 policyengine_uk/parameters/gov/contrib/ubi_center/land_value_tax.yaml
@@ -485,6 +488,7 @@ policyengine_uk/parameters/gov/simulation/labor_supply_responses/bounds/README.m
 policyengine_uk/parameters/gov/simulation/labor_supply_responses/bounds/effective_wage_rate_change.yaml
 policyengine_uk/parameters/gov/simulation/labor_supply_responses/bounds/income_change.yaml
 policyengine_uk/parameters/gov/simulation/private_school_vat/private_school_attendance_rate.yaml
+policyengine_uk/parameters/gov/simulation/private_school_vat/private_school_factor.yaml
 policyengine_uk/parameters/gov/simulation/private_school_vat/private_school_fees.yaml
 policyengine_uk/parameters/gov/simulation/private_school_vat/private_school_vat_basis.yaml
 policyengine_uk/parameters/gov/treasury/README.md
@@ -683,10 +687,13 @@ policyengine_uk/tests/policy/reforms/parametric/basic_income/basic_income.yaml
 policyengine_uk/tests/policy/reforms/parametric/basic_income/bi_maximum.yaml
 policyengine_uk/tests/policy/reforms/parametric/basic_income/phase_out.yaml
 policyengine_uk/utils/__init__.py
+policyengine_uk/utils/create_triple_lock.py
 policyengine_uk/utils/parameters.py
 policyengine_uk/utils/psnd.py
+policyengine_uk/utils/solve_private_school_attendance_factor.py
 policyengine_uk/variables/contrib/cec/non_primary_residence_wealth_tax.py
 policyengine_uk/variables/contrib/labour/private_school_vat.py
+policyengine_uk/variables/contrib/policyengine/employer_ni/employer_ni_fixed_employer_cost_change.py
 policyengine_uk/variables/contrib/ubi_center/carbon_tax.py
 policyengine_uk/variables/contrib/ubi_center/land_value_tax.py
 policyengine_uk/variables/contrib/ubi_center/wealth_tax.py
@@ -884,6 +891,7 @@ policyengine_uk/variables/household/geography.py
 policyengine_uk/variables/household/marginal_tax_rate.py
 policyengine_uk/variables/household/benefits/employment_benefits.py
 policyengine_uk/variables/household/consumption/carbon.py
+policyengine_uk/variables/household/consumption/consumption_share.py
 policyengine_uk/variables/household/consumption/expense.py
 policyengine_uk/variables/household/consumption/fuel.py
 policyengine_uk/variables/household/consumption/property.py

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/PolicyEngine_UK.egg-info/requires.txt

@@ -1,5 +1,5 @@
 PolicyEngine-Core>=3.6.4
-PolicyEngine-UK-Data<1.3,>=1.2.5
+PolicyEngine-UK-Data<1.6,>=1.5
 microdf_python
 
 [dev]

PolicyEngine-UK-2.3.0/policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/README.md

@@ -0,0 +1 @@
+# Employer NI

PolicyEngine-UK-2.3.0/policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/employee_incidence.yaml

@@ -0,0 +1,6 @@
+description: Assume that employers keep employment costs constant in response to employer NI changes.
+values:
+  2010-01-01: true
+metadata:
+  label: Employer NI employee incidence
+  unit: bool

PolicyEngine-UK-2.3.0/policyengine_uk/parameters/gov/contrib/policyengine/employer_ni/exempt_employer_pension_contributions.yaml

@@ -0,0 +1,6 @@
+description: Whether to exempt employer pension contributions from employer NI.
+values:
+  2010-01-01: true
+metadata:
+  unit: bool
+  label: exempt employer pension contributions from employers' NI

PolicyEngine-UK-2.3.0/policyengine_uk/parameters/gov/dwp/state_pension/triple_lock.yaml

@@ -0,0 +1,28 @@
+description: Indexation of the State Pension under the triple lock.
+metadata:
+  reference:
+  - href: https://commonslibrary.parliament.uk/research-briefings/cbp-7812/
+    title: House of Commons Library
+  unit: /1
+
+values:
+  2010-01-01: 1.000
+  2011-01-01: 1.046
+  2012-01-01: 1.100
+  2013-01-01: 1.128
+  2014-01-01: 1.158
+  2015-01-01: 1.187
+  2016-01-01: 1.222
+  2017-01-01: 1.252
+  2018-01-01: 1.290
+  2019-01-01: 1.323
+  2020-01-01: 1.375
+  2021-01-01: 1.409 # Earnings increase FY2020/2019 = 0.2%, CPI increase FY2020/2019 = 0.6%
+  2022-01-01: 1.495 # Earnings increase FY2021/2020 = 6.0%, CPI increase FY2021/2020 = 3.9%
+  2023-01-01: 1.645 # Earnings increase FY2022/2021 = 5.7%, CPI increase FY2022/2021 = 10.1%
+  2024-01-01: 1.751 # Earnings increase FY2023/2022 = 6.5%, CPI increase FY2023/2022 = 5.7%
+  2025-01-01: 1.805 # Earnings increase FY2024/2023 = 3.1%, CPI increase FY2024/2023 = 1.6%
+  2026-01-01: 1.850 # Earnings increase FY2025/2024 = 1.9%, CPI increase FY2025/2024 = 1.6%
+  2027-01-01: 1.896 # Earnings increase FY2026/2025 = 2.2%, CPI increase FY2026/2025 = 1.7%
+  2028-01-01: 1.944 # Earnings increase FY2027/2026 = 2.3%, CPI increase FY2027/2026 = 2.0%
+  

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/dwp/winter_fuel_payment/eligibility/require_benefits.yaml

@@ -1,6 +1,12 @@
 description: Whether receipt of means-tested benefits is required to qualify for the Winter Fuel Payment.
 values:
-  2000-01-01: true
+  2000-01-01: false
+  2024-01-01: 
+    value: true
+    metadata:
+      reference:
+      - title: The Social Fund Winter Fuel Payment Regulations 2024 regulation 2
+        href: https://www.legislation.gov.uk/uksi/2024/869/regulation/2
 metadata:
   unit: bool
   label: Winter Fuel Payment means-tested benefits requirement

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/hmrc/income_tax/income_tax_additions.yaml

@@ -8,4 +8,4 @@ values:
   - savings_income_tax
   - dividend_income_tax
   - CB_HITC
-  - private_pension_contributions_tax
+  - personal_pension_contributions_tax

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/hmrc/pensions/pensions_programs.yaml

@@ -1,8 +1,8 @@
 description: Pensions programs
 values:
   0000-01-01:
-    - private_pension_contributions
-    - occupational_pension_contributions
+    - personal_pension_contributions
+    - employee_pension_contributions
     
 metadata:
   unit: list

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/average_earnings.yaml

@@ -21,6 +21,7 @@ values:
   2026-01-01: 160.9
   2027-01-01: 164.6
   2028-01-01: 168.9
+  2029-01-01: 173.3 # Projected
 metadata:
   unit: /1
   reference:

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/consumer_price_index.yaml

@@ -15,6 +15,7 @@ values:
   2026-01-01: 138.2
   2027-01-01: 140.9
   2028-01-01: 143.7
+  2029-01-01: 146.6 # Projected
 metadata:
   unit: /1
   reference:

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/house_prices.yaml

@@ -21,6 +21,7 @@ values:
   2026-01-01: 148.6
   2027-01-01: 153.8
   2028-01-01: 159.5
+  2029-01-01: 165.7 # Projected
 metadata:
   unit: currency-GBP
   reference:

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/inflation/food_beverages_and_tobacco.yaml

@@ -11,6 +11,7 @@ values:
   2026-01-01: 1.387
   2027-01-01: 1.426
   2028-01-01: 1.461
+  2029-01-01: 1.497 # Projected
 metadata:
   unit: currency-GBP
   reference: OBR

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/inflation/utilities.yaml

@@ -11,6 +11,7 @@ values:
   2026-01-01: 1.281
   2027-01-01: 1.313
   2028-01-01: 1.365
+  2029-01-01: 1.418 # Projected
 metadata:
   unit: currency-GBP
   reference: OBR

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/mixed_income.yaml

@@ -17,6 +17,7 @@ values:
   2026-01-01: 193.5
   2027-01-01: 202.3
   2028-01-01: 211.8
+  2029-01-01: 221.9 # Projected
 metadata:
   reference:
     - title: OBR March 2024 EFO

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/mortgage_interest.yaml

@@ -21,6 +21,7 @@ values:
   2026-01-01: 113.2
   2027-01-01: 119.7
   2028-01-01: 125.2
+  2029-01-01: 130.7 # Projected
 metadata:
   unit: currency-GBP
   reference:

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/parameters/gov/obr/non_labour_income.yaml

@@ -17,6 +17,7 @@ values:
   2026-01-01: 504.4
   2027-01-01: 543.6
   2028-01-01: 585.3
+  2029-01-01: 629.3 # Projected
 metadata:
   reference:
     - title: OBR March 2024 EFO

PolicyEngine-UK-2.3.0/policyengine_uk/parameters/gov/simulation/private_school_vat/private_school_factor.yaml

@@ -0,0 +1,6 @@
+description: student polulation adjustment factor, tested by Vahid
+values:
+  2010-01-01: 0.77
+metadata:
+  unit: /1
+  label: student polulation adjustment factor

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/tests/policy/baseline/contrib/labour/attends_private_school.yaml

@@ -1,25 +1,3 @@
-- name: Attends private school returns True when attendance rate is 100%
-  period: 2024
-  input:
-    gov.simulation.private_school_vat.private_school_attendance_rate.100: 1
-    gov.simulation.private_school_vat.private_school_attendance_rate.95: 1
-    people:
-      adult: 
-        age: 25
-      child:
-        age: 10
-    households:
-      household:
-        household_weight: 0.001
-        household_market_income: 1_000_000_000
-        household_benefits: 0
-        members: [
-          adult,
-          child
-        ]
-  output:
-    attends_private_school: [False, True]
-
 - name: Attends private school returns False when attendance rate is 0%
   period: 2024
   input:

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/tests/policy/baseline/finance/benefit/family/universal_credit.yaml

@@ -6,7 +6,7 @@
       person:
         age: 30
         employment_income: 30_000
-        private_pension_contributions: 1_000
+        personal_pension_contributions: 1_000
         weekly_hours: 20
     benunits:
       benunit:
@@ -30,7 +30,7 @@
       person:
         age: 30
         employment_income: 3_000
-        private_pension_contributions: 1_000
+        personal_pension_contributions: 1_000
         weekly_hours: 20
     benunits:
       benunit:
@@ -85,7 +85,7 @@
         age: 20
         weekly_hours: 25
         employment_income: 12_000
-        private_pension_contributions: 57
+        personal_pension_contributions: 57
         dla_m: 62.55 * 52
         uc_limited_capability_for_WRA: true
       person_2:

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/tests/policy/baseline/gov/hmrc/income_tax/income_tax.yaml

@@ -10,6 +10,6 @@
   absolute_error_margin: 10
   input:
     employment_income: 34000
-    private_pension_contributions: 1200
+    personal_pension_contributions: 1200
   output:
     income_tax: (34000 - 1200 - 12500) * 0.2

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/tests/policy/baseline/gov/hmrc/pensions/pension_contributions.yaml

@@ -1,63 +1,63 @@
 - name: No pension contributions
   period: 2024
   input:
-    private_pension_contributions: 0
-    occupational_pension_contributions: 0
+    personal_pension_contributions: 0
+    employee_pension_contributions: 0
   output:
     pension_contributions: 0
 
 - name: Only private pension contributions
   period: 2024
   input:
-    private_pension_contributions: 5000
-    occupational_pension_contributions: 0
+    personal_pension_contributions: 5000
+    employee_pension_contributions: 0
   output:
     pension_contributions: 5000
 
 - name: Only occupational pension contributions
   period: 2024
   input:
-    private_pension_contributions: 0
-    occupational_pension_contributions: 7500
+    personal_pension_contributions: 0
+    employee_pension_contributions: 7500
   output:
     pension_contributions: 7500
 
 - name: Both types of pension contributions
   period: 2024
   input:
-    private_pension_contributions: 3000
-    occupational_pension_contributions: 4000
+    personal_pension_contributions: 3000
+    employee_pension_contributions: 4000
   output:
     pension_contributions: 7000
 
 - name: High contribution amounts
   period: 2024
   input:
-    private_pension_contributions: 20000
-    occupational_pension_contributions: 30000
+    personal_pension_contributions: 20000
+    employee_pension_contributions: 30000
   output:
     pension_contributions: 50000
 
 - name: Very low positive contributions
   period: 2024
   input:
-    private_pension_contributions: 1
-    occupational_pension_contributions: 1
+    personal_pension_contributions: 1
+    employee_pension_contributions: 1
   output:
     pension_contributions: 2
 
 - name: Uneven contributions
   period: 2024
   input:
-    private_pension_contributions: 1234.56
-    occupational_pension_contributions: 9876.54
+    personal_pension_contributions: 1234.56
+    employee_pension_contributions: 9876.54
   output:
     pension_contributions: 11111.10
 
 - name: Maximum allowed annual contributions (for 2023/2024 tax year)
   period: 2024
   input:
-    private_pension_contributions: 40000
-    occupational_pension_contributions: 20000
+    personal_pension_contributions: 40000
+    employee_pension_contributions: 20000
   output:
     pension_contributions: 60000

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/tests/policy/baseline/gov/hmrc/pensions/pension_contributions_relief.yaml

@@ -3,7 +3,7 @@
   absolute_error_margin: 0
   input:
     employment_income: 76000
-    private_pension_contributions: 40000
+    personal_pension_contributions: 40000
   output:
     pension_contributions_relief: 40000
 - name: Pension relief excessive
@@ -11,7 +11,7 @@
   absolute_error_margin: 0
   input:
     employment_income: 2000000
-    private_pension_contributions: 400000
+    personal_pension_contributions: 400000
   output:
     pension_contributions_relief: 4000
 - name: £30k self-employment income, no private pension contributions
@@ -27,7 +27,7 @@
   absolute_error_margin: 0.01
   input:
     self_employment_income: 30_000
-    private_pension_contributions: 3_000
+    personal_pension_contributions: 3_000
   output:
     pension_contributions_relief: 3_000
     income_tax: 3286 - 3000 * 0.2
@@ -45,7 +45,7 @@
   absolute_error_margin: 0.01
   input:
     self_employment_income: 60_000
-    private_pension_contributions: 6_000
+    personal_pension_contributions: 6_000
   output:
     pension_contributions_relief: 6_000
     income_tax: 11032 - 6000 * 0.4

PolicyEngine-UK-2.3.0/policyengine_uk/utils/create_triple_lock.py

@@ -0,0 +1,20 @@
+from policyengine_uk.system import system
+
+# Run this script to generate the triple lock parameter for updated CPI and average earnings forecasts from the OBR.
+
+cpi = system.parameters.gov.obr.consumer_price_index
+average_earnings = system.parameters.gov.obr.average_earnings
+
+START_YEAR = 2021
+
+triple_lock = system.parameters.gov.dwp.state_pension.triple_lock
+lock_value = triple_lock(START_YEAR - 1)
+
+for year in range(START_YEAR, 2029):
+    earnings_increase = average_earnings(year - 1) / average_earnings(year - 2)
+    cpi_increase = cpi(year - 1) / cpi(year - 2)
+    triple_lock_increase = max(earnings_increase, cpi_increase, 1.025)
+    lock_value *= triple_lock_increase
+    print(
+        f"  {year}-01-01: {lock_value:.3f} # Earnings increase FY{year - 1}/{year - 2} = {earnings_increase-1:.1%}, CPI increase FY{year - 1}/{year - 2} = {cpi_increase-1:.1%}"
+    )

PolicyEngine-UK-2.3.0/policyengine_uk/utils/solve_private_school_attendance_factor.py

@@ -0,0 +1,41 @@
+from policyengine_uk import Microsimulation
+from policyengine_core.reforms import Reform
+
+# Initialize variables to track the best private_school_factor and its result
+best_factor = None
+smallest_difference = float("inf")
+
+# Loop over values of private_school_factor from 0.7 to 0.8 in steps of 0.01
+for factor in [round(x * 0.01, 2) for x in range(70, 81)]:
+    # Define the reform with the current private_school_factor value
+    reform = Reform.from_dict(
+        {
+            "gov.contrib.labour.private_school_vat": {
+                "2024-01-01.2100-12-31": 0.2
+            },
+            "gov.simulation.private_school_vat.private_school_factor": {
+                "2024-01-01.2100-12-31": factor
+            },
+        },
+        country_id="uk",
+    )
+
+    # Run the reformed microsimulation
+    reformed = Microsimulation(reform=reform)
+
+    # Calculate the number of students attending private school in thousands
+    private_school_attendance = (
+        reformed.calculate("attends_private_school", period=2025).sum() / 1e3
+    )
+
+    # Compare the result with 550 and track the best value
+    difference = abs(private_school_attendance - 550)
+    if difference < smallest_difference:
+        smallest_difference = difference
+        best_factor = factor
+
+# Report the best private_school_factor
+print(
+    f"The best private_school_factor is {best_factor} with a difference of {smallest_difference}"
+)
+# The best private_school_factor is 0.77 with a difference of 1.3427231160653719

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/variables/contrib/labour/private_school_vat.py

@@ -18,6 +18,8 @@ class attends_private_school(Variable):
             ps_vat_params.private_school_attendance_rate
         )
 
+        population_adjustment_factor = ps_vat_params.private_school_factor
+
         person = household.members
 
         is_child = person("is_child", period)
@@ -44,7 +46,8 @@ class attends_private_school(Variable):
             .clip(0, 100)
             .values.astype(numpy.int64)
         )
-        STUDENT_POPULATION_ADJUSTMENT_FACTOR = 1.1
+        # STUDENT_POPULATION_ADJUSTMENT_FACTOR = 0.78
+        STUDENT_POPULATION_ADJUSTMENT_FACTOR = population_adjustment_factor
 
         p_attends_private_school = (
             np.array(

PolicyEngine-UK-2.3.0/policyengine_uk/variables/contrib/policyengine/employer_ni/employer_ni_fixed_employer_cost_change.py

@@ -0,0 +1,110 @@
+from policyengine_uk.model_api import *
+
+
+class employer_cost(Variable):
+    label = "employer cost"
+    entity = Person
+    definition_period = YEAR
+    value_type = float
+    unit = GBP
+
+    def formula(person, period, parameters):
+        return person("employment_income", period) + person(
+            "ni_employer", period
+        )
+
+
+class employer_ni_fixed_employer_cost_change(Variable):
+    label = "employer NI reform incidence"
+    entity = Person
+    definition_period = YEAR
+    value_type = float
+    unit = GBP
+
+    def formula(person, period, parameters):
+        if not parameters(
+            period
+        ).gov.contrib.policyengine.employer_ni.employee_incidence:
+            return 0
+        # First, calculate baseline and reformed employer NI contributions.
+
+        prior_employment_income = person(
+            "employment_income_before_lsr", period
+        )
+        employment_income_behavioral_response = person(
+            "employment_income_behavioral_response", period
+        )
+        benefits = add(
+            person,
+            period,
+            [
+                "household_statutory_sick_pay",
+                "household_statutory_maternity_pay",
+                "household_statutory_paternity_pay",
+            ],
+        )
+        employer_pension_contributions = person(
+            "employer_pension_contributions", period
+        )
+        ni_class_1_income = (
+            prior_employment_income
+            + employment_income_behavioral_response
+            + benefits
+            + employer_pension_contributions
+        )
+
+        # Calculate baseline employer cost
+        baseline_parameters = parameters(period).baseline
+        baseline_class_1 = (
+            baseline_parameters.gov.hmrc.national_insurance.class_1
+        )
+        r_b = baseline_class_1.rates.employer
+        t_b = baseline_class_1.thresholds.secondary_threshold * WEEKS_IN_YEAR
+        p_b = (
+            baseline_parameters.gov.contrib.policyengine.employer_ni.exempt_employer_pension_contributions
+        )
+        pen_con_subtracted_b = employer_pension_contributions
+        if p_b:
+            pen_con_subtracted_b = employer_pension_contributions
+        else:
+            pen_con_subtracted_b = 0
+
+        baseline_employer_ni = r_b * (
+            ni_class_1_income - pen_con_subtracted_b - t_b
+        )
+        c_b = ni_class_1_income + baseline_employer_ni
+
+        # Calculate new employment income keeping employer cost constant
+
+        reform_parameters = parameters(period)
+        reform_class_1 = reform_parameters.gov.hmrc.national_insurance.class_1
+        r_r = reform_class_1.rates.employer
+        t_r = reform_class_1.thresholds.secondary_threshold * WEEKS_IN_YEAR
+        p_r = (
+            reform_parameters.gov.contrib.policyengine.employer_ni.exempt_employer_pension_contributions
+        )
+        if p_r:
+            pen_con_subtracted_r = employer_pension_contributions
+        else:
+            pen_con_subtracted_r = 0
+
+        new_ni_class_1_income = (c_b + r_r * (pen_con_subtracted_r + t_r)) / (
+            1 + r_r
+        )
+
+        # Find difference in employment income
+
+        previous_employment_income = (
+            ni_class_1_income - benefits
+        ) - employer_pension_contributions
+        new_employment_income = (
+            new_ni_class_1_income - benefits
+        ) - employer_pension_contributions
+
+        pay_change = new_employment_income - previous_employment_income
+
+        # Where a person's prior employment income was below the secondary threshold, the formula doesn't hold, so assume no change.
+
+        below_threshold = previous_employment_income < t_b
+
+        return where(below_threshold, 0, pay_change)

{PolicyEngine-UK-2.1.1 → PolicyEngine-UK-2.3.0}/policyengine_uk/variables/gov/hmrc/national_insurance/class_1/ni_class_1_employer.py

@@ -13,13 +13,22 @@ class ni_class_1_employer(Variable):
     def formula(person, period, parameters):
         class_1 = parameters(period).gov.hmrc.national_insurance.class_1
         earnings = person("ni_class_1_income", period)
+        if not parameters(
+            period
+        ).gov.contrib.policyengine.employer_ni.exempt_employer_pension_contributions:
+            added_pension_contributions = person(
+                "employer_pension_contributions", period
+            )
+            taxed_earnings = earnings + added_pension_contributions
+        else:
+            taxed_earnings = earnings
         secondary_threshold = (
             class_1.thresholds.secondary_threshold
             * WEEKS_IN_YEAR
             / MONTHS_IN_YEAR
         )
         main_earnings = max_(
-            earnings - secondary_threshold,
+            taxed_earnings - secondary_threshold,
             0,
         )
         return class_1.rates.employer * main_earnings