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Fix bad SS targets #222

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Merged
nwoodruff-co merged 1 commit into from
Nov 27, 2025
Merged

Fix bad SS targets #222

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4 changes: 4 additions & 0 deletions changelog_entry.yaml
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Original file line number Diff line number Diff line change
@@ -0,0 +1,4 @@
- bump: patch
changes:
fixed:
- Hallucinated calibration targets.
60 changes: 0 additions & 60 deletions policyengine_uk_data/utils/loss.py
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Original file line number Diff line number Diff line change
Expand Up @@ -194,66 +194,6 @@ def pe_count(*variables):
employer_ni_relief
)

# HMRC Table 6.2 - Salary sacrifice income tax relief by tax rate
# This helps calibrate the distribution of SS users by income level
# 2023-24 values (£m): Basic £1,600, Higher £4,400, Additional £1,200
# Total IT relief from SS: £7,200m
# Use true counterfactual: IT relief = counterfactual IT - baseline IT
income_tax_baseline = sim.calculate("income_tax")
income_tax_cf = counterfactual_sim.calculate("income_tax", time_period)
it_relief = income_tax_cf - income_tax_baseline

# Get tax band from counterfactual adjusted net income (where SS is wages)
adjusted_net_income_cf = counterfactual_sim.calculate(
"adjusted_net_income", time_period
)
basic_rate_threshold = (
sim.tax_benefit_system.parameters.gov.hmrc.income_tax.rates.uk[
0
].threshold(time_period)
)
higher_rate_threshold = (
sim.tax_benefit_system.parameters.gov.hmrc.income_tax.rates.uk[
1
].threshold(time_period)
)
additional_rate_threshold = (
sim.tax_benefit_system.parameters.gov.hmrc.income_tax.rates.uk[
2
].threshold(time_period)
)

# Determine tax band for each person based on counterfactual income
is_basic_rate = (adjusted_net_income_cf > basic_rate_threshold) & (
adjusted_net_income_cf <= higher_rate_threshold
)
is_higher_rate = (adjusted_net_income_cf > higher_rate_threshold) & (
adjusted_net_income_cf <= additional_rate_threshold
)
is_additional_rate = adjusted_net_income_cf > additional_rate_threshold

# Allocate the true IT relief to tax bands
ss_it_relief_basic = it_relief * is_basic_rate
ss_it_relief_higher = it_relief * is_higher_rate
ss_it_relief_additional = it_relief * is_additional_rate

df["hmrc/salary_sacrifice_it_relief_basic"] = household_from_person(
ss_it_relief_basic
)
df["hmrc/salary_sacrifice_it_relief_higher"] = household_from_person(
ss_it_relief_higher
)
df["hmrc/salary_sacrifice_it_relief_additional"] = household_from_person(
ss_it_relief_additional
)

# Total gross salary sacrifice contributions
# This is derived from the IT relief: £7.2bn IT relief at ~30% avg rate
# implies ~£24bn gross contributions (but we target the relief directly)
df["hmrc/salary_sacrifice_contributions"] = household_from_person(
ss_contributions
)

# Population statistics from the ONS.

region = sim.calculate("region", map_to="person")
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