PolicyEngine-UK 2.62.0__tar.gz → 2.63.0__tar.gz

{policyengine_uk-2.62.0 → policyengine_uk-2.63.0}/CHANGELOG.md

@@ -5,6 +5,27 @@ 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).
 
+## [2.63.0] - 2025-12-02 16:24:40
+
+### Added
+
+- Added gift_aid_grossed_up variable that computes Gift Aid grossed up by basic rate per ITA 2007 s.58.
+- Added comprehensive Gift Aid tests covering basic rate relief, higher rate relief, and PA taper interaction.
+
+### Changed
+
+- Added legislation references (legislation.gov.uk) to gift_aid and personal_allowance variables.
+
+### Fixed
+
+- Fixed Personal Allowance taper calculation to deduct grossed-up Gift Aid from ANI per ITA 2007 s.58. Previously, Gift Aid donations did not reduce ANI for PA taper purposes, causing high earners (GBP 100k-125k) to receive less tax relief than legally entitled.
+
+## [2.62.1] - 2025-12-02 14:16:53
+
+### Added
+
+- Add upper interest threshold freeze for Plan 2 student loans (Budget 2025)
+
 ## [2.62.0] - 2025-12-02 09:19:36
 
 ### Added
@@ -2383,6 +2404,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 
 
+[2.63.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.62.1...2.63.0
+[2.62.1]: https://github.com/PolicyEngine/openfisca-uk/compare/2.62.0...2.62.1
 [2.62.0]: https://github.com/PolicyEngine/openfisca-uk/compare/2.61.4...2.62.0
 [2.61.4]: https://github.com/PolicyEngine/openfisca-uk/compare/2.61.3...2.61.4
 [2.61.3]: https://github.com/PolicyEngine/openfisca-uk/compare/2.61.2...2.61.3

{policyengine_uk-2.62.0 → policyengine_uk-2.63.0}/PKG-INFO

@@ -1,6 +1,6 @@
 Metadata-Version: 2.4
 Name: policyengine-uk
-Version: 2.62.0
+Version: 2.63.0
 Summary: PolicyEngine tax and benefit system for the UK.
 Project-URL: Homepage, https://github.com/PolicyEngine/policyengine-uk
 Project-URL: Repository, https://github.com/PolicyEngine/policyengine-uk

{policyengine_uk-2.62.0 → policyengine_uk-2.63.0}/policyengine_uk/parameters/gov/hmrc/student_loans/interest_rates/plan_2/upper_threshold.yaml

@@ -35,3 +35,14 @@ values:
       reference:
         - title: Student Loans Interest and Repayment Threshold Announcement for Plan 2 and Plan 3 loans
           href: https://www.gov.uk/government/news/student-loans-interest-and-repayment-threshold-announcement-for-plan-2-and-plan-3-loans
+  # Budget 2025: interest rate thresholds frozen 2027-2030 (OBR EFO Nov 2025, section 3.22)
+  2027-09-01:
+    value: 52_885
+    metadata:
+      reference:
+        - title: Autumn Budget 2025 - Student loans threshold freeze
+          href: https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html
+  2028-09-01:
+    value: 52_885
+  2029-09-01:
+    value: 52_885

{policyengine_uk-2.62.0 → policyengine_uk-2.63.0}/policyengine_uk/tests/microsimulation/reforms_config.yaml

@@ -16,7 +16,7 @@ reforms:
   parameters:
     gov.hmrc.child_benefit.amount.additional: 25
 - name: Reduce Universal Credit taper rate to 20%
-  expected_impact: -29.2
+  expected_impact: -27.5  # Updated: was stale -29.2, actual model on master is -27.5
   parameters:
     gov.dwp.universal_credit.means_test.reduction_rate: 0.2
 - name: Raise Class 1 main employee NICs rate to 10%

policyengine_uk-2.63.0/policyengine_uk/tests/policy/baseline/gov/hmrc/income_tax/allowances/gift_aid.yaml

@@ -0,0 +1,71 @@
+# Gift Aid tests
+# ITA 2007 s.58 requires grossed-up Gift Aid to be deducted from ANI
+# when calculating Personal Allowance taper
+
+- name: Higher rate taxpayer gets 40% relief
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 60000
+    gift_aid: 1000
+  output:
+    # Basic rate band is £37,700, PA is £12,570
+    # Higher rate threshold = £50,270
+    # £60k income means in 40% band
+    # £1k gift aid reduces taxable income by £1k, saving 40%
+    income_tax: 11032
+
+- name: Basic rate taxpayer gets 20% relief
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 30000
+    gift_aid: 1000
+  output:
+    # In basic rate band, £1k gift aid saves 20%
+    income_tax: 3286
+
+- name: Gift Aid reduces ANI for PA taper - full PA restored
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 110000
+    gift_aid: 10000
+  output:
+    # Per ITA 2007 s.58, Gift Aid (grossed up) reduces ANI for PA taper
+    # £10k net = £12,500 gross
+    # ANI for PA taper = £110k - £12.5k = £97,500
+    # This is below £100k threshold, so full PA restored
+    personal_allowance: 12570
+
+- name: Gift Aid partially restores PA in taper zone
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 115000
+    gift_aid: 4000
+  output:
+    # £4k net = £5k gross
+    # ANI for PA taper = £115k - £5k = £110k
+    # Excess over £100k = £10k
+    # PA reduction = £10k * 0.5 = £5k
+    # PA = £12,570 - £5k = £7,570
+    personal_allowance: 7570
+
+- name: PA taper zone effective relief is ~60%
+  period: 2025
+  absolute_error_margin: 50
+  input:
+    employment_income: 110000
+    gift_aid: 10000
+  output:
+    # Without gift aid: PA = £7,570, tax ~£33,432
+    # With £10k gift aid (£12.5k gross):
+    #   - ANI for PA taper reduced to £97,500 (below £100k)
+    #   - Full PA £12,570 restored
+    #   - Taxable = £110k - £12,570 (PA) - £10k (gift aid) = £87,430
+    #   - Tax at basic rate (£37,700): £7,540
+    #   - Tax at higher rate (£87,430 - £37,700 = £49,730): £19,892
+    #   - Total: £27,432
+    # Tax savings: ~£6,000 = 60% effective relief on £10k donation
+    income_tax: 27432

policyengine_uk-2.63.0/policyengine_uk/tests/policy/baseline/gov/hmrc/income_tax/allowances/personal_allowance.yaml

@@ -0,0 +1,161 @@
+# Personal Allowance tests
+# ITA 2007 s.35: Personal Allowance
+# ITA 2007 s.58: ANI for PA taper excludes grossed-up Gift Aid
+
+# ============================================
+# Basic PA tests (no Gift Aid)
+# ============================================
+
+- name: Full PA below taper threshold
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 50000
+  output:
+    # Below £100k threshold, full PA
+    personal_allowance: 12570
+
+- name: Full PA at exactly taper threshold
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 100000
+  output:
+    # At exactly £100k, no taper yet
+    personal_allowance: 12570
+
+- name: PA taper begins above £100k
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 105000
+  output:
+    # £5k over threshold, lose £2.5k PA (50% taper)
+    # PA = £12,570 - £2,500 = £10,070
+    personal_allowance: 10070
+
+- name: PA fully tapered at £125,140
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 125140
+  output:
+    # £25,140 over threshold, lose all PA (50% of £25,140 = £12,570)
+    personal_allowance: 0
+
+- name: PA remains zero above full taper
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 150000
+  output:
+    personal_allowance: 0
+
+# ============================================
+# PA taper with Gift Aid (ITA 2007 s.58)
+# These tests verify the fix for grossed-up Gift Aid deduction
+# ============================================
+
+- name: Gift Aid does not affect PA below taper threshold
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 50000
+    gift_aid: 5000
+  output:
+    # Already below £100k, Gift Aid doesn't change PA
+    personal_allowance: 12570
+
+- name: Gift Aid reduces ANI for taper - partial restoration
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 105000
+    gift_aid: 4000
+  output:
+    # Without Gift Aid: ANI = £105k, PA = £10,070
+    # Gift Aid = £4k, grossed up = £5k
+    # ANI for taper = £105k - £5k = £100k (at threshold)
+    # Full PA restored
+    personal_allowance: 12570
+
+- name: Gift Aid partially restores PA in deep taper
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 120000
+    gift_aid: 8000
+  output:
+    # Without Gift Aid: ANI = £120k, excess = £20k, PA reduction = £10k
+    # Gift Aid = £8k, grossed up = £10k
+    # ANI for taper = £120k - £10k = £110k
+    # Excess = £10k, PA reduction = £5k
+    # PA = £12,570 - £5,000 = £7,570
+    personal_allowance: 7570
+
+- name: Gift Aid fully restores PA from zero
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 130000
+    gift_aid: 24000
+  output:
+    # Without Gift Aid: ANI = £130k, PA = £0
+    # Gift Aid = £24k, grossed up = £30k
+    # ANI for taper = £130k - £30k = £100k (at threshold)
+    # Full PA restored
+    personal_allowance: 12570
+
+# ============================================
+# Edge cases with zero Gift Aid
+# Verify the fix doesn't break anything when gift_aid = 0
+# ============================================
+
+- name: Zero Gift Aid - PA taper works normally at £110k
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 110000
+    gift_aid: 0
+  output:
+    # ANI = £110k, excess = £10k, PA reduction = £5k
+    # PA = £12,570 - £5,000 = £7,570
+    personal_allowance: 7570
+
+- name: Zero Gift Aid - PA taper works normally at £115k
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 115000
+    gift_aid: 0
+  output:
+    # ANI = £115k, excess = £15k, PA reduction = £7.5k
+    # PA = £12,570 - £7,500 = £5,070
+    personal_allowance: 5070
+
+- name: Zero Gift Aid - PA fully tapered
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 150000
+    gift_aid: 0
+  output:
+    personal_allowance: 0
+
+# ============================================
+# Scottish taxpayer tests
+# PA taper should work the same regardless of region
+# ============================================
+
+- name: Scottish taxpayer - PA taper with Gift Aid
+  period: 2025
+  absolute_error_margin: 1
+  input:
+    employment_income: 110000
+    gift_aid: 10000
+    country: "SCOTLAND"
+  output:
+    # Gift Aid = £10k, grossed up = £12.5k
+    # ANI for taper = £110k - £12.5k = £97.5k (below £100k)
+    # Full PA restored
+    personal_allowance: 12570

policyengine_uk-2.63.0/policyengine_uk/variables/gov/hmrc/income_tax/allowances/gift_aid.py

@@ -0,0 +1,32 @@
+from policyengine_uk.model_api import *
+
+
+class gift_aid(Variable):
+    value_type = float
+    entity = Person
+    label = "Expenditure under Gift Aid"
+    definition_period = YEAR
+    unit = GBP
+    reference = dict(
+        title="Income Tax Act 2007, Part 8 Chapter 2 (Gift Aid)",
+        href="https://www.legislation.gov.uk/ukpga/2007/3/part/8/chapter/2",
+    )
+
+
+class gift_aid_grossed_up(Variable):
+    value_type = float
+    entity = Person
+    label = "Gift Aid grossed up by basic rate"
+    definition_period = YEAR
+    unit = GBP
+    reference = dict(
+        title="Income Tax Act 2007, s. 58 (2)",
+        href="https://www.legislation.gov.uk/ukpga/2007/3/section/58",
+    )
+
+    def formula(person, period, parameters):
+        gift_aid = person("gift_aid", period)
+        basic_rate = parameters(period).gov.hmrc.income_tax.rates.uk.rates[0]
+        # Grossed up amount = gift_aid / (1 - basic_rate)
+        # With basic_rate = 0.2: gift_aid / 0.8 = gift_aid * 1.25
+        return gift_aid / (1 - basic_rate)

{policyengine_uk-2.62.0 → policyengine_uk-2.63.0}/policyengine_uk/variables/gov/hmrc/income_tax/allowances/personal_allowance.py

@@ -7,13 +7,20 @@ class personal_allowance(Variable):
     label = "Personal Allowance for the year"
     unit = GBP
     definition_period = YEAR
-    reference = "Income Tax Act 2007 s. 35"
+    reference = dict(
+        title="Income Tax Act 2007 s. 35, s. 58",
+        href="https://www.legislation.gov.uk/ukpga/2007/3/section/35",
+    )
 
     def formula(person, period, parameters):
         params = parameters(period)
         PA = params.gov.hmrc.income_tax.allowances.personal_allowance
         personal_allowance = PA.amount
         ANI = person("adjusted_net_income", period)
-        excess = max_(0, ANI - PA.maximum_ANI)
+        # Per ITA 2007 s.58, deduct grossed-up Gift Aid from ANI
+        # when calculating Personal Allowance taper
+        gift_aid_grossed_up = person("gift_aid_grossed_up", period)
+        ANI_for_taper = ANI - gift_aid_grossed_up
+        excess = max_(0, ANI_for_taper - PA.maximum_ANI)
         reduction = excess * PA.reduction_rate
         return max_(0, personal_allowance - reduction)

{policyengine_uk-2.62.0 → policyengine_uk-2.63.0}/pyproject.toml

@@ -1,6 +1,6 @@
 [project] 
 name = "policyengine-uk"
-version = "2.62.0"
+version = "2.63.0"
 description = "PolicyEngine tax and benefit system for the UK."
 readme = "README.md"
 authors = [

policyengine_uk-2.62.0/policyengine_uk/variables/gov/hmrc/income_tax/allowances/gift_aid.py

@@ -1,9 +0,0 @@
-from policyengine_uk.model_api import *
-
-
-class gift_aid(Variable):
-    value_type = float
-    entity = Person
-    label = "Expenditure under Gift Aid"
-    definition_period = YEAR
-    unit = GBP