Add model baseline page, update docs (#1289)

* Update CGT and employer NI parameters

* Update docs and add model baseline page

* Update make

* Add jb install

* Add jb dep

* Update makefile

Author: nikhilwoodruff

.gitignore

@@ -80,3 +80,6 @@ coverage.xml
 .hypothesis/
 .pytest_cache/
 cover/
+
+# Docs
+**/_build/

Makefile

@@ -1,3 +1,5 @@
+.PHONY: docs
+
 all: install
 	pip install build
 	python -m build
@@ -19,10 +21,12 @@ update-tests:
 	python policyengine_uk/tests/microsimulation/update_reform_impacts.py
 
 documentation:
-	jb clean docs/book
-	jb build docs/book
+	cd docs/book && jupyter book clean --all -y
+	cd docs/book && jupyter book build --html
 	python docs/book/add_plotly_to_book.py docs/book/_build
 
+docs: documentation
+
 changelog:
 	build-changelog changelog.yaml --output changelog.yaml --update-last-date --start-from 0.1.0 --append-file changelog_entry.yaml
 	build-changelog changelog.yaml --org PolicyEngine --repo openfisca-uk --output CHANGELOG.md --template .github/changelog_template.md

changelog_entry.yaml

@@ -0,0 +1,6 @@
+- bump: minor
+  changes:
+    added:
+    - Docs upgraded to jupyter book 2.
+    - Model baseline page added.
+    - Capital gains tax baseline updated.

docs/book/_config.yml

@@ -25,4 +25,3 @@ sphinx:
     - "sphinx.ext.napoleon"
     - "sphinx_math_dollar"
     - "sphinx.ext.mathjax"
-

docs/book/_toc.yml

@@ -15,4 +15,5 @@ parts:
       - file: validation/hbai
   - caption: Policy
     chapters:
+      - file: policy/model-baseline
       - file: policy/uc-rebalancing

docs/book/myst.yml

@@ -0,0 +1,48 @@
+version: 1
+project:
+  title: PolicyEngine UK documentation
+  authors:
+    - name: PolicyEngine
+  copyright: "2024"
+  github: https://github.com/policyengine/policyengine-uk
+  repository:
+    url: https://github.com/policyengine/policyengine-uk
+    branch: master
+    path: docs/book
+  toc:
+    - file: index
+    - title: Usage
+      children:
+      - file: usage/getting-started
+      - file: usage/simulations
+      - file: usage/scenarios
+    - title: Assumptions
+      children:
+      - file: assumptions/growthfactors
+      - file: assumptions/water-bills
+    - title: Validation
+      children:
+      - file: validation/hbai
+    - title: Policy
+      children:
+      - file: policy/model-baseline
+      - file: policy/uc-rebalancing
+site:
+  options:
+    logo: logo.png
+  template: book-theme
+  extensions:
+    - sphinx.ext.autodoc
+    - sphinx.ext.viewcode
+    - sphinx.ext.napoleon
+    - sphinx_math_dollar
+    - sphinx.ext.mathjax
+  config:
+    html_js_files:
+      - https://cdnjs.cloudflare.com/ajax/libs/require.js/2.3.4/require.min.js
+    html_theme: furo
+    pygments_style: default
+    html_css_files:
+      - style.css
+  execute:
+    execute_notebooks: off

docs/book/policy/model-baseline.md

@@ -0,0 +1,106 @@
+# Model baseline
+
+PolicyEngine UK models the UK tax and benefit system as of 2025, incorporating major reforms from 2020-2025. This page documents the key policy changes by year, working backwards from 2025, showing how each reform is implemented in the codebase.
+
+## 2025 reforms
+
+### Autumn Budget 2024
+
+The government increased the [employer National Insurance rate from 13.8% to 15%](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_1/rates/employer.yaml#L13-L17) and reduced the [employer secondary threshold from £9,100 to £5,000 annually](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_1/thresholds/secondary_threshold.yaml#L26-L30), both taking effect in fiscal year 2025-26.
+
+### Universal Credit rebalancing
+
+Parliament passed legislation to implement Universal Credit rebalancing reforms, with the [rebalancing switch activated in fiscal year 2025-26](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/rebalancing/active.yaml#L3). The reforms include [graduated standard allowance uplifts](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/rebalancing/standard_allowance_uplift.yaml) above inflation: 2.3% in 2026-27, 3.1% in 2027-28, 4.0% in 2028-29, and 4.8% in 2029-30. A [new health element of £217.26](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/rebalancing/new_claimant_health_element.yaml#L3) will be introduced for new claimants in fiscal year 2026-27.
+
+### Benefit uprating
+
+Annual benefit uprating applied 4.1% increases to state pensions and 1.7% to working-age benefits, implemented through the [standard uprating mechanism](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/benefit_uprating_cpi.yaml).
+
+## 2024 reforms
+
+### Autumn Statement 2023
+
+The government announced further National Insurance cuts, reducing the [employee main rate from 10% to 8%](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_1/rates/employee/main.yaml#L22-L27) and the [self-employed Class 4 rate from 9% to 6%](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_4/rates/main.yaml#L16-L21) in fiscal year 2024-25. [Class 2 National Insurance contributions were abolished](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_2/flat_rate.yaml#L14-L19) for self-employed people, with the flat rate set to £0 in fiscal year 2024-25.
+
+### Capital gains tax changes (Autumn Budget 2024)
+
+The government increased capital gains tax rates from 10%/20% to [18% for basic rate taxpayers](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/cgt/basic_rate.yaml#L4) and [24% for higher rate taxpayers](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/cgt/higher_rate.yaml#L4) in fiscal year 2025-26.
+
+### Spring Budget 2024
+
+The government increased the [child benefit high income tax charge threshold from £50,000 to £60,000](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/income_tax/charges/CB_HITC/phase_out_start.yaml#L4) in fiscal year 2024-25.
+
+### Autumn Statement 2023 (Employee NI cut)
+
+An initial National Insurance cut reduced the [employee main rate from 12% to 10%](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_1/rates/employee/main.yaml#L16-L21) in fiscal year 2024-25.
+
+## 2023 reforms
+
+### Autumn Statement 2022
+
+The government reduced the [additional rate income tax threshold from £150,000 to £125,140](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/income_tax/rates/uk.yaml#L74-L78), taking effect in fiscal year 2023-24. The government also began reducing the [capital gains tax annual exempt amount from £12,300 to £6,000](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/cgt/annual_exempt_amount.yaml#L6-L10) in fiscal year 2023-24, with a further reduction to [£3,000 in fiscal year 2024-25](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/cgt/annual_exempt_amount.yaml#L11-L15).
+
+## 2022 reforms
+
+### Spring Statement 2022
+
+The government announced an increase in the [National Insurance primary threshold from £9,880 to £12,570](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_1/thresholds/primary_threshold.yaml#L17-L22), aligning it with the personal allowance in fiscal year 2022-23.
+
+### Autumn Budget 2021 (Health and Social Care Levy)
+
+The government temporarily increased [National Insurance rates by 1.25 percentage points](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/national_insurance/class_1/rates/employee/main.yaml#L4-L10) in fiscal year 2022-23, later reversed the same fiscal year.
+
+### Mini-Budget 2022 (September)
+
+The government announced increases to [stamp duty nil rate thresholds](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/stamp_duty/residential/purchase/main/subsequent.yaml), raising the main threshold from £125,000 to £250,000 and the first-time buyer threshold to £425,000.
+
+### Cost of living support
+
+The government announced cost of living payments: [£650 for means-tested benefit recipients](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/treasury/cost_of_living_support/means_tested_households/amount.yaml#L3), [£300 for pensioners](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/treasury/cost_of_living_support/pensioners/amount.yaml#L3), and [£150 for disability benefit recipients](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/treasury/cost_of_living_support/disabled/amount.yaml#L3), implemented through dedicated [payment calculation variables](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/variables/gov/treasury/cost_of_living_support/cost_of_living_support_payment.py).
+
+### Energy Price Guarantee
+
+Following the energy crisis, the government introduced an [Energy Price Guarantee capping typical household bills at £2,500](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/ofgem/energy_price_guarantee.yaml#L12-L18) in fiscal year 2022-23.
+
+## 2021 reforms
+
+### Autumn Budget 2021
+
+The government reduced the [Universal Credit taper rate from 63% to 55%](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/means_test/reduction_rate.yaml#L5) and increased [work allowances by £500 annually](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/means_test/work_allowance/without_housing.yaml#L9) in fiscal year 2021-22.
+
+### End of COVID-19 support
+
+The government ended the [Universal Credit £20 weekly uplift](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/standard_allowance/amount.yaml) in fiscal year 2021-22, with rates reducing from the elevated 2020-21 levels.
+
+### Stamp duty holiday extension
+
+The government extended the stamp duty holiday with [phased withdrawal of the nil rate increases](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/stamp_duty/residential/purchase/main/subsequent.yaml#L20-L22) during fiscal year 2021-22.
+
+## 2020 reforms
+
+### Summer Economic Update (July 2020)
+
+The government introduced a [stamp duty holiday with nil rates up to £500,000](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/hmrc/stamp_duty/residential/purchase/main/subsequent.yaml#L9-L15) in fiscal year 2020-21 to support the housing market.
+
+### COVID-19 response (March 2020)
+
+Emergency measures included a [£20 weekly increase to Universal Credit standard allowances](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/parameters/gov/dwp/universal_credit/standard_allowance/amount.yaml#L6) and other working-age benefits in fiscal year 2020-21.
+
+## Current baseline (2025)
+
+The model baseline includes all reforms above, resulting in:
+- **Income tax**: 20%/40%/45% rates with personal allowance of £12,570 and higher rate threshold of £50,270
+- **National Insurance**: 8% employee rate, 15% employer rate, 6% self-employed rate
+- **Capital gains tax**: 18%/24% rates with £3,000 annual exempt amount
+- **Universal Credit**: 55% taper rate with rebalancing reforms active
+- **Benefits**: Standard uprating with targeted cost of living support for 2022
+
+## What is not modelled
+
+The model does not include:
+- **PIP reform announced in Autumn Statement 2023**: The government announced reforms to Personal Independence Payment assessments and eligibility criteria, phasing out 25% of claimants between 2025-29. These reforms are [defined as a scenario](https://github.com/PolicyEngine/policyengine-uk/blob/master/policyengine_uk/scenarios/pip_reform.py) but not included in the baseline model
+- **Non-domiciled taxation changes**: Remittance basis abolition and four-year exemption regime from fiscal year 2025-26 are not modelled
+- **Non-UK resident stamp duty surcharge**: 2% additional rate from fiscal year 2021-22 is not modelled
+- **Some devolved tax policies**: Beyond property transaction taxes, other devolved policies may have limited coverage
+
+All parameter values include references to primary legislation and can be found in the [PolicyEngine UK parameters directory](https://github.com/PolicyEngine/policyengine-uk/tree/master/policyengine_uk/parameters).

policyengine_uk/parameters/gov/hmrc/cgt/additional_rate.yaml

@@ -1,6 +1,11 @@
 description: Capital gains tax rate on additional rate taxpayers. This parameter is under active development and reforms including it should not be cited.
 values:
   2015-01-01: 0.2
+  2025-04-06: 0.24
 metadata:
   unit: /1
   label: Capital Gains Tax additional rate
+  reference:
+    - title: Finance Act 2025(7)
+      href: https://www.legislation.gov.uk/ukpga/2025/8/section/7
+

policyengine_uk/parameters/gov/hmrc/cgt/basic_rate.yaml

@@ -1,6 +1,11 @@
 description: Capital gains tax rate on basic rate taxpayers. This parameter is under active development and reforms including it should not be cited.
 values:
   2015-01-01: 0.1
+  2025-04-06: 0.18
 metadata:
   unit: /1
   label: Capital Gains Tax basic rate
+  reference:
+    - title: Finance Act 2025(7)
+      href: https://www.legislation.gov.uk/ukpga/2025/8/section/7
+

policyengine_uk/parameters/gov/hmrc/cgt/higher_rate.yaml

@@ -1,6 +1,10 @@
 description: Capital gains tax rate on higher rate taxpayers. This parameter is under active development and reforms including it should not be cited.
 values:
   2015-01-01: 0.2
+  2025-04-06: 0.24
 metadata:
   unit: /1
   label: Capital Gains Tax higher rate
+  reference:
+    - title: Finance Act 2025(7)
+      href: https://www.legislation.gov.uk/ukpga/2025/8/section/7