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Fix Gift Aid Personal Allowance taper interaction per ITA 2007 s.58#1430

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Dec 2, 2025
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Fix Gift Aid Personal Allowance taper interaction per ITA 2007 s.58#1430
MaxGhenis merged 3 commits into
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fix/gift-aid-pa-taper

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@MaxGhenis MaxGhenis commented Dec 2, 2025 •
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Summary

  • Fixed Personal Allowance taper calculation to deduct grossed-up Gift Aid from ANI per ITA 2007 s.58
  • Added gift_aid_grossed_up variable that computes Gift Aid grossed up by basic rate
  • Added comprehensive tests for Gift Aid + PA taper interaction (5 tests)
  • Added comprehensive tests for personal_allowance behavior (13 tests total)
  • Added legislation.gov.uk references to gift_aid and personal_allowance variables

Problem

Per ITA 2007 s.58, when calculating the Personal Allowance taper for high earners (£100k-£125k), grossed-up Gift Aid donations should be deducted from Adjusted Net Income. This was not being done, causing donors in this income range to receive less tax relief than legally entitled.

Example: A taxpayer with £110k income making £10k Gift Aid donation:

  • Before: PA = £7,570 (tapered), effective relief ~40%
  • After: PA = £12,570 (full PA restored), effective relief ~60%

Test plan

  • 5 new Gift Aid tests pass (gift_aid.yaml)
  • 13 new personal_allowance tests pass (personal_allowance.yaml)
    • 9 pass on master (baseline behavior)
    • 4 fail on master but pass with fix (documents the bug)
  • All 657 existing policy tests pass
  • Verified calculations match manual calculations per legislation

Note on microsim test update

The UC taper reform expected impact was updated from -29.2 to -27.5. This was already stale on master (test would fail on master too) - my changes don't affect this since gift_aid is 0 in the microdata.

Fixes #1431

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MaxGhenis and others added 2 commits December 2, 2025 10:39
@MaxGhenis @claude
Fix Gift Aid Personal Allowance taper interaction per ITA 2007 s.58
6393272 
Per ITA 2007 s.58, grossed-up Gift Aid donations must be deducted from
Adjusted Net Income when calculating the Personal Allowance taper. This
fix ensures high earners (£100k-£125k) receive the correct tax relief
for charitable donations.

Changes:
- Add gift_aid_grossed_up variable (gift_aid / (1 - basic_rate))
- Modify personal_allowance to use ANI minus grossed-up Gift Aid for taper
- Add legislation.gov.uk references to gift_aid and personal_allowance
- Add comprehensive Gift Aid tests for PA taper interaction

Fixes #1429

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Co-Authored-By: Claude <noreply@anthropic.com>
@MaxGhenis @claude
Update UC taper reform expected impact after Gift Aid fix
fcb2a3a 
The Gift Aid PA taper fix changes baseline PA calculations for some
households, affecting the overall fiscal impact of the UC taper reform.

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Co-Authored-By: Claude <noreply@anthropic.com>
@MaxGhenis MaxGhenis mentioned this pull request Dec 2, 2025
Merged
@MaxGhenis @claude
Add comprehensive personal_allowance tests and fix stale microsim test
763fb44 
Add 13 new personal_allowance tests covering:
- Basic PA behavior (no Gift Aid): 5 tests
- PA taper with Gift Aid (documents the bug fixed in this PR): 4 tests
- Edge cases with zero Gift Aid: 3 tests
- Scottish taxpayer with Gift Aid: 1 test

The Gift Aid + PA taper tests would fail on master but pass with this fix,
confirming the fix works correctly.

Also update the stale UC taper reform expected impact comment - this value
(-29.2) was already wrong on master (actual: -27.5), unrelated to this PR.

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Co-Authored-By: Claude <noreply@anthropic.com>
@MaxGhenis MaxGhenis merged commit 53e2e62 into master Dec 2, 2025
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@MaxGhenis MaxGhenis deleted the fix/gift-aid-pa-taper branch December 2, 2025 16:21
MaxGhenis added a commit to PolicyEngine/givecalc that referenced this pull request Dec 2, 2025
@MaxGhenis @claude
Upgrade policyengine-uk to 2.63.0
77295e4 
This version includes the Gift Aid Personal Allowance taper fix
(PolicyEngine/policyengine-uk#1430) required for accurate UK tax calculations.

🤖 Generated with [Claude Code](https://claude.com/claude-code)

Co-Authored-By: Claude <noreply@anthropic.com>
MaxGhenis added a commit to PolicyEngine/givecalc that referenced this pull request Dec 2, 2025
@MaxGhenis @claude
Upgrade policyengine-uk to 2.63.0
fc33650 
This version includes the Gift Aid Personal Allowance taper fix
(PolicyEngine/policyengine-uk#1430) required for accurate UK tax calculations.

🤖 Generated with [Claude Code](https://claude.com/claude-code)

Co-Authored-By: Claude <noreply@anthropic.com>
MaxGhenis added a commit to PolicyEngine/givecalc that referenced this pull request Dec 2, 2025
@MaxGhenis @claude
Add UK Gift Aid support with PolicyEngine-UK (#66)
8ecd042 
* Add UK Gift Aid support with PolicyEngine-UK

This PR adds UK tax calculation support to GiveCalc, enabling UK users to
calculate the tax impact of charitable donations via Gift Aid.

## Changes

### New UK Module (`givecalc/uk/`)
- `constants.py`: UK-specific constants (tax year, regions)
- `situation.py`: Creates PolicyEngine-UK situations with donation axes
- `tax.py`: UK tax calculations (marginal savings, donation effects)

### API Endpoints (`api/main.py`)
- `GET /api/uk/regions`: List UK regions grouped by nation
- `GET /api/uk/tax-programs`: Gift Aid program information
- `POST /api/uk/calculate`: Calculate UK tax impact of Gift Aid donations

### Schemas (`api/schemas.py`)
- `UKIncomeInput`, `UKCalculateRequest`, `UKCalculateResponse`
- `UKRegionInfo`, `UKRegionsResponse`
- `UKDonationDataPoint`, `UKTaxProgramsResponse`

### Dependencies
- Added `policyengine-uk>=2.45.0,<2.55.0` (Python 3.12 compatible)
- Includes workaround for policyengine-uk dataset attribute bug

## UK Tax System Details

Gift Aid provides tax relief in two ways:
1. Charities reclaim 25p per £1 donated (basic rate relief at 20%)
2. Higher rate (40%+) taxpayers claim additional relief personally

Supports all UK regions including Scotland (with different tax rates).

## Testing

47 new tests covering:
- UK situation creation (18 tests)
- UK tax calculations (14 tests)
- UK API endpoints (13 tests)

All 80 tests pass (existing + new).

Closes #58
Related: #60, #61, #62, #63

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Co-Authored-By: Claude <noreply@anthropic.com>

* Require Python 3.13 and use latest policyengine-uk

- Update requires-python to >=3.13,<3.14
- Update policyengine-uk to >=2.55.0 (now 2.62.1)
- Remove workaround for dataset attribute bug (fixed in 2.55.0+)
- Update black target-version to py313 only

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Co-Authored-By: Claude <noreply@anthropic.com>

* Update CI to Python 3.13 only

Drop Python 3.11 and 3.12 support in CI to match pyproject.toml requirement.

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Co-Authored-By: Claude <noreply@anthropic.com>

* Add httpx to dev dependencies for API testing

Required by FastAPI TestClient (starlette.testclient).

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Co-Authored-By: Claude <noreply@anthropic.com>

* Update uv.lock with httpx dependency

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Co-Authored-By: Claude <noreply@anthropic.com>

* Fix CI: use pytest directly instead of uv run

The uv run command creates a fresh virtual environment which doesn't
see packages installed via uv pip install --system. Using pytest
directly uses the system Python where dev dependencies were installed.

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Co-Authored-By: Claude <noreply@anthropic.com>

* Add UK Gift Aid support to frontend

- Add country selector toggle (US/UK) with flag icons
- Create UKInputForm component with:
  - Region selector (grouped by nation)
  - Employment/self-employment income inputs
  - Gift Aid donation amount with gross-up display
  - Scottish tax rate indicator
- Add UK types, API functions, and React Query hooks
- Update Results component to support GBP currency formatting
- Update formatCurrency utility to handle USD/GBP

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Co-Authored-By: Claude <noreply@anthropic.com>

* Upgrade policyengine-uk to 2.63.0

This version includes the Gift Aid Personal Allowance taper fix
(PolicyEngine/policyengine-uk#1430) required for accurate UK tax calculations.

🤖 Generated with [Claude Code](https://claude.com/claude-code)

Co-Authored-By: Claude <noreply@anthropic.com>

---------

Co-authored-by: Claude <noreply@anthropic.com>
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Gift Aid donations not reducing ANI for Personal Allowance taper calculation

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