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UK Tax-Benefit Legislative Reference

This document specifies exactly how each program modelled in policyengine-uk-rust should work, with citations to the primary and secondary legislation that governs each calculation. It was compiled on 28 March 2026 using the Lex MCP (legislation.gov.uk) and cross-checked against the parameter files.

Legislation links follow the pattern https://www.legislation.gov.uk/{type}/{year}/{number}, e.g. https://www.legislation.gov.uk/ukpga/2007/3 for the Income Tax Act 2007.

1. Income Tax

Primary authority

  • Income Tax Act 2007 (ITA 2007) — ukpga/2007/3
  • Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) — ukpga/2003/1

1.1 Personal Allowance

Source: ITA 2007 s.35 (ukpga/2007/3/section/35)

Every UK resident individual is entitled to a personal allowance (PA). For 2025/26 onwards this is £12,570 per annum, frozen at that level through 2027/28 by Finance Act 2021 s.5 (ukpga/2021/26/section/5).

PA taper (ITA 2007 s.35(2)): where adjusted net income (ANI) exceeds £100,000, the PA is reduced by £1 for every £2 of excess. The PA reaches zero at ANI = £125,140.

Adjusted net income (ITA 2007 s.58): total income less reliefs (pension contributions, gift aid, etc.).

1.2 UK Income Tax Rates and Bands

Source: ITA 2007 ss.6, 10 (ukpga/2007/3/section/6)

Tax is charged on taxable income (income above PA) in bands:

Band Rate Taxable income (above PA)
Basic 20% £0 – £37,700
Higher 40% £37,700 – £125,140
Additional 45% Above £125,140

The basic rate limit (£37,700) and additional rate threshold (£125,140) are frozen. Finance Act 2023 reduced the additional rate threshold from £150,000 to £125,140 from 2023/24.

1.3 Scottish Income Tax

Source: Scotland Act 1998 s.80C (ukpga/1998/46/section/80C); rates set by annual Scottish Rate Resolution of the Scottish Parliament.

Scottish taxpayers pay Scottish income tax on non-savings, non-dividend income instead of UK rates. For 2024/25 (confirmed; 2025/26 unverified as Scottish Parliament instrument not in Lex):

Band Rate Threshold above PA
Starter 19% £0
Basic 20% £2,306
Intermediate 21% £13,991
Higher 42% £31,092
Advanced 45% £62,430
Top 48% £125,140

Note: the Top rate threshold is aligned to the UK additional rate threshold. The model applies Scottish rates only when the is_scottish_taxpayer flag is set.

1.4 Savings and Dividend Income

Savings starter rate band (ITA 2007 s.12): up to £5,000 of savings income may be taxed at 0% where non-savings income does not use the band.

Dividend allowance (ITA 2007 s.13A, as amended by FA 2023): £500 of dividend income is tax-free (reduced from £1,000 in 2023/24, from £2,000 in 2022/23).

Dividend rates (ITA 2007 s.8): 8.75% (basic), 33.75% (higher), 39.35% (additional).

1.5 Marriage Allowance

Source: ITA 2007 ss.55A–55C (ukpga/2007/3/section/55A)

A non-taxpaying spouse/civil partner may transfer up to 10% of their personal allowance to a basic-rate taxpaying partner, rounded to the nearest £10. This reduces the transferor's PA and increases the recipient's PA by the same amount, giving a tax saving of up to £252/year (10% of £12,570 × 20% basic rate).

Conditions (ITA 2007 s.55A): transferor's income must be below the basic rate threshold; recipient must be a basic-rate taxpayer. The election is made by the transferor (s.55C).

Calculation (src/variables/income_tax.rs):

  1. Transfer amount = floor(PA × 0.10 / rounding_increment) × rounding_increment = £1,257 (rounded to £1,260 at £10 increments)
  2. Transferor: PA reduced by £1,260; compute income tax on reduced PA
  3. Recipient: PA increased by £1,260; compute income tax on increased PA
  4. Marriage allowance benefit = (tax without transfer) − (combined tax with transfer)

2. National Insurance Contributions

Primary authority

  • Social Security Contributions and Benefits Act 1992 (SSCBA 1992) — ukpga/1992/4
  • National Insurance Contributions Act 2024 (NIC Act 2024) — ukpga/2024/5
  • National Insurance Contributions Act 2025 (NIC Act 2025) — ukpga/2025/11
  • Annual regulations: SI 2025/288 (Social Security (Contributions) (Rates, Limits and Thresholds Amendments) Regulations 2025)

2.1 Class 1 Employee (Primary) Contributions

Source: SSCBA 1992 ss.5–8 (ukpga/1992/4/section/5)

NI is charged on earnings above the Primary Threshold (PT) up to the Upper Earnings Limit (UEL), then at the additional rate above the UEL.

Threshold 2025/26
Primary Threshold (PT) £12,570/year (aligned to PA)
Upper Earnings Limit (UEL) £50,270/year
Band Rate
PT to UEL 8% (main rate, reduced from 12% → 10% by NIC (Reduction) Act 2023; to 8% by NIC Act 2024 s.1)
Above UEL 2% (additional rate)

The main rate reduction from 10% to 8% took effect 6 April 2024 (NIC Act 2024 s.1, ukpga/2024/5/section/1).

Note on 2023/24: The main rate was 12% from 6 April 2023, reduced to 10% from 6 January 2024 by the National Insurance Contributions (Reduction in Rates) Act 2023 c.57 s.1. A blended annual rate of approximately 11.5% applies for modelling 2023/24 (9 months × 12% + 3 months × 10%).

2.2 Class 1 Employer (Secondary) Contributions

Source: SSCBA 1992 s.9 (ukpga/1992/4/section/9); NIC Act 2025 ss.1–2 (ukpga/2025/11/section/1)

Employers pay NI on employee earnings above the Secondary Threshold (ST):

Parameter Pre-April 2025 From April 2025
Secondary Threshold £9,100/year £5,000/year
Employer rate 13.8% 15%

Changes from April 2025 were enacted by the National Insurance Contributions Act 2025 (Autumn Budget 2024 measure). The Employment Allowance was simultaneously increased to £10,500.

2.3 Class 2 Contributions (Self-Employed Flat Rate)

Source: SSCBA 1992 s.11 (ukpga/1992/4/section/11)

Class 2 NI was abolished from 6 April 2024 by the National Insurance Contributions Act 2024. For 2023/24 and earlier years, Class 2 was charged at a flat weekly rate (£3.45/week in 2023/24) on self-employed persons whose profits exceeded the Small Profits Threshold. From 2024/25 onward, the rate is zero.

2.4 Class 4 Contributions (Self-Employed Profits)

Source: SSCBA 1992 s.15 (ukpga/1992/4/section/15); NIC Act 2024 s.2 (ukpga/2024/5/section/2)

Class 4 is charged on self-employed profits:

Band Rate (2025/26)
Lower Profits Limit (LPL) to Upper Profits Limit (UPL) 6% (reduced from 8% by NIC Act 2024 s.2)
Above UPL 2%
LPL £12,570/year
UPL £50,270/year

The reduction from 9% → 8% took effect 6 April 2023; from 8% → 6% from 6 April 2024.

3. Universal Credit

Primary authority

  • Welfare Reform Act 2012 (WRA 2012) — ukpga/2012/5
  • Universal Credit Regulations 2013 (SI 2013/376) — uksi/2013/376
  • SI 2025/295 (Social Security Benefits Up-rating Order 2025) — uksi/2025/295

3.1 Standard Allowance

Source: SI 2013/376 reg.36 (uksi/2013/376/regulation/36)

Monthly amounts (per assessment period, 2025/26):

Category Monthly
Single under 25 £316.98
Single 25 or over £400.14
Couple both under 25 £497.55
Couple (one or both 25+) £628.10

3.2 Child Element

Source: SI 2013/376 reg.24 and reg.36; Welfare Reform and Work Act 2016 s.14 (2-child limit)

Monthly child element (2025/26):

  • First child: £339.00/month
  • Each subsequent child: £292.81/month

Two-child limit: no child element for a third or subsequent child born on or after 6 April 2017, unless an exception applies (multiple birth, non-consensual conception, adopted child — reg.26A). Children born before 6 April 2017 are grandfathered.

Disabled child additions (reg.24(2)):

  • Lower rate (DLA/PIP lower): £158.76/month
  • Higher rate (DLA/PIP higher/care): £495.87/month

3.3 LCWRA and Carer Elements

Source: SI 2013/376 regs.27, 29 (uksi/2013/376/regulation/29)

  • LCWRA element (Limited Capability for Work-Related Activity): £423.27/month — added where a claimant has been assessed as having LCWRA, or is terminally ill.
  • Carer element: £201.68/month — added where a claimant provides at least 35 hours/week of care to a severely disabled person.

Only one LCWRA element per claim (reg.27). Carer and LCWRA elements cannot both be paid to the same claimant; whichever is higher applies.

3.4 Work Allowance and Taper

Source: SI 2013/376 reg.22 (uksi/2013/376/regulation/22); SI 2025/295 art.32

A work allowance (WA) is only available to claimants who are responsible for a child or who have LCWRA. Housing costs alone do not create entitlement to a WA.

Work allowance type 2025/26 monthly
Higher (no housing costs in UC) £684
Lower (housing costs included in UC) £411

Taper: 55% of earned income above the work allowance is deducted from the UC award (reg.22(1)). Where no WA applies, 55% of all earned income reduces the award.

Formula:

uc_award = max(0, maximum_uc − 0.55 × max(0, earned_income − work_allowance))

3.5 Housing Cost Element

Source: SI 2013/376 Sch.4 (uksi/2013/376/schedule/4)

The housing cost contribution of £93.02/month (2025/26, Sch.4 para.14(1)) is deducted from UC for non-dependants living with the claimant (owner-occupier housing element).

Note: the full housing costs element (rent) is not currently modelled in this package; only the distinction between higher/lower work allowance (which depends on whether housing costs are in the UC award) is captured.

3.6 Benefit Cap

See section 11.

4. Child Benefit

Primary authority

4.1 Rates

Child benefit is paid weekly per child (2025/26):

Child Weekly rate
Eldest (or only) child £26.05
Each additional child £17.25

Uprated by SI 2025/292 art.2 from 7 April 2025.

Entitlement is to every person responsible for a child under 16 (or under 20 in approved education/training). Only one person can claim per child.

4.2 High Income Child Benefit Charge (HICBC)

Source: ITEPA 2003 ss.681B–681H (ukpga/2003/1/section/681B)

Where the higher earner in a household has ANI above the threshold, a tax charge claws back child benefit. From 2024/25 (Finance Act 2024):

Parameter Value
Threshold £60,000 ANI
Taper end £80,000 ANI

Charge formula (s.681B(3)): charge = child_benefit_received × min(1, (ANI − 60,000) / 20,000)

At ANI ≥ £80,000, the charge equals 100% of child benefit received — effectively a full clawback.

The charge applies to whichever partner has the higher ANI (s.681B(1)). The model implements this as a reduction in net child benefit rather than a separate tax charge (functionally equivalent to the net calculation).

5. State Pension

Primary authority

5.1 New State Pension (nSP)

Source: Pensions Act 2014 ss.2–4 (ukpga/2014/19/section/2)

Applies to individuals reaching State Pension Age (SPA) on or after 6 April 2016.

Entitlement (s.2):

  • Full rate: 35 or more qualifying years of NI contributions/credits
  • Reduced rate: at least 10 qualifying years; rate = full_rate × (qualifying_years / 35)
  • Below 10 qualifying years: no state pension

Full rate (2025/26): £230.25/week, set by SI 2025/295 art.6(1)

Transitional rate (s.4 and Sch.1): for those with pre-April 2016 NI records, the higher of:

  1. Old system pension calculated as at 6 April 2016, or
  2. New system pension (qualifying_years/35 × full rate) is used as a "foundation amount"; post-April 2016 years then add 1/35 of the full rate per year.

The model approximates this by applying the full rate to persons of SPA with sufficient NI records, without modelling the full transitional computation.

5.2 Old Basic State Pension (Category A)

Source: SSCBA 1992 Sch.4 Part I; SI 2025/295 art.4

Applies to individuals who reached SPA before 6 April 2016.

Full basic pension (2025/26): £176.45/week, set by SI 2025/295 art.4(2).

Requires 30 qualifying years for the full rate. The model currently applies the full basic pension rate to all pre-2016-SPA pensioners without modelling partial entitlement.

5.3 Triple Lock

Both state pensions are uprated annually by the triple lock: the highest of CPI inflation, average earnings growth, or 2.5%. This is a policy commitment, not a statutory formula, but is implemented via the annual up-rating order (SI 2025/295).

6. Pension Credit

Primary authority

  • State Pension Credit Act 2002 (SPCA 2002) — ukpga/2002/16
  • State Pension Credit Regulations 2002 (SI 2002/1792) — uksi/2002/1792
  • SI 2025/295 arts.29–30 (up-rating)

Pension Credit has two parts: Guarantee Credit and Savings Credit.

6.1 Guarantee Credit

Source: SPCA 2002 s.2 (ukpga/2002/16/section/2); SI 2002/1792 reg.6

Available to anyone who has reached Pension Credit qualifying age (currently SPA) whose income falls below the Standard Minimum Guarantee (SMG).

SMG (2025/26):

  • Single person: £227.10/week
  • Couple: £346.60/week

Amount: Guarantee Credit tops up income to the SMG:

guarantee_credit = max(0, standard_minimum_guarantee − applicable_income)

Applicable income includes state pension, private pensions, earnings, and deemed income from capital above £10,000 (£1/week per £500 or part thereof above £10,000).

6.2 Savings Credit

Source: SPCA 2002 s.3 (ukpga/2002/16/section/3); SI 2002/1792 reg.7

Eligibility: only available to individuals who reached SPA before 6 April 2016 (s.3(1)(a)). This cohort is shrinking and Savings Credit is being phased out; it is unavailable to those reaching SPA under the new state pension (post-April 2016).

Threshold (2025/26):

  • Single: £198.27/week
  • Couple: £314.34/week

Maximum savings credit: 60p per £1 of qualifying income between the threshold and the SMG.

max_savings_credit = 0.60 × (SMG − savings_credit_threshold)

The savings credit is then reduced by 40p per £1 of income above the SMG.

Implementation note: The current model does not apply the pre-April-2016 SPA eligibility restriction at src/variables/benefits.rs:348–367. This should be fixed.

7. Housing Benefit

Primary authority

Housing Benefit (HB) is a legacy benefit. No new claimants can join; existing claimants are being migrated to UC via managed migration. The model applies HB only to claimants who have not yet migrated (governed by uc_migration.housing_benefit rates).

7.1 Maximum HB

Source: SI 2006/213 reg.70 (uksi/2006/213/regulation/70)

Maximum HB = 100% of eligible rent (subject to LHA caps for private renters). The model does not compute LHA caps; it uses reported rent directly.

7.2 Applicable Amount

Source: SI 2006/213 regs.20–23, Sch.3

The applicable amount is the benchmark income for means-testing:

applicable_amount = personal_allowance + premiums

Personal allowances (weekly, 2025/26) — uprated by SI 2025/295:

  • Single under 25: £71.70
  • Single 25+: £90.50
  • Couple: £142.25
  • Child/young person: £83.73 per child
  • Family premium (if any children): £18.53

7.3 Taper (Withdrawal Rate)

Source: SI 2006/213 reg.71 (uksi/2006/213/regulation/71)

Where income exceeds the applicable amount, HB is reduced at 65% of the excess:

hb = max(0, maximum_hb − 0.65 × max(0, income − applicable_amount))

8. Working Tax Credit (WTC)

Primary authority

  • Tax Credits Act 2002 (TCA 2002) ss.10–12 — ukpga/2002/21
  • Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (SI 2002/2005) — uksi/2002/2005

WTC is a legacy benefit; no new claims since UC rollout. The model applies WTC only to claimants not yet migrated to UC.

8.1 Eligibility and Elements

Source: SI 2002/2005 regs.3–20

Eligibility requires minimum working hours. Maximum WTC is the sum of applicable elements:

Element Annual amount (2025/26) Qualifying condition
Basic element £2,435 Any eligible claimant
Couple element £2,500 Couple claim
Lone parent element £2,500 Lone parent
30-hour element £1,015 Working ≥ 30 hrs/week (single); couple ≥ 24 hrs combined with one ≥ 16 hrs

Minimum hours (regs.4–8):

  • Single claimant: 30 hours/week (or 16 if aged 60+, disabled, or lone parent)
  • Couple with children: at least one member working 16 hrs/week
  • Couple without children: each must work 16 hrs/week (combined 24 hrs+ from 2012)

8.2 Income Taper

Source: TCA 2002 s.13 (ukpga/2002/21/section/13)

WTC is reduced where income exceeds the income threshold:

reduction = 0.41 × max(0, income − threshold)
tax_credit = max(0, maximum_wtc − reduction)

Income threshold (2025/26): £7,455/year. Taper rate: 41%.

9. Child Tax Credit (CTC)

Primary authority

CTC is a legacy benefit paid alongside WTC (or standalone where income too high for WTC).

9.1 Elements

Source: SI 2002/2007 reg.7 (uksi/2002/2007/regulation/7)

Element Annual (2025/26) Condition
Family element £545 At least one child born before 6 April 2017
Individual element £3,455/child Per qualifying child
Disability element £4,170/child Child receives DLA/PIP
Severe disability element £1,680/child Additional — child in highest rate DLA care

Two-child limit: from April 2017, the individual element is not payable for a third or subsequent child born on or after 6 April 2017 (TCA 2002 s.9(3A), inserted by Welfare Reform and Work Act 2016 s.13).

The family element is only payable where at least one child was born before 6 April 2017.

9.2 Taper

Source: TCA 2002 s.13; SI 2002/2008 (Child Tax Credit (Income Thresholds) Regulations)

Same 41% taper applies. Where a family is entitled to both WTC and CTC, WTC is tapered first; CTC taper is applied from a higher income threshold:

  • With WTC: tapered from the WTC income threshold (£7,455)
  • CTC only: tapered from a higher threshold (£19,995 in 2025/26)

10. Income Support

Primary authority

Income Support (IS) is a legacy income-related benefit for people not required to seek work (lone parents with young children, carers, etc.). UC is replacing it. The model applies IS only to claimants who have not yet migrated to UC.

10.1 Applicable Amount

Source: SI 1987/1967 reg.17; Sch.2 Part I

IS is paid where income falls below the applicable amount:

is = max(0, applicable_amount − income)

The applicable amount consists of personal allowances and any premiums. The personal allowance rates are the same structure as Housing Benefit (weekly amounts by age/family type), uprated annually by the Social Security Benefits Up-rating Order.

No new entrants: Under current policy the IS caseload consists entirely of legacy claimants being migrated to UC. The model therefore does not compute IS entitlement for new claimants; it applies only to existing reported IS recipients scaled by the migration rate.

11. Benefit Cap

Primary authority

11.1 Cap Amounts

Source: WRA 2012 s.96; SI 2016/909 reg.4. Cap amounts are frozen since November 2016.

Category London Outside London
Single (no children) £15,410/year £13,400/year
Couple/lone parent £23,000/year £20,000/year

11.2 Exemptions

Earnings exemption (SI 2016/909 reg.6): where the claimant (or partner) has net earned income above the threshold, the cap does not apply. The threshold from April 2025 is £10,152/year (£846/month), uprated from £7,400.

Note: The 2023/24 and 2024/25 parameter files use £7,400 for this threshold; the 2025/26 file correctly uses £10,152.

Other exemptions: claimants receiving:

  • Working Tax Credit
  • Disability Living Allowance / Personal Independence Payment
  • Attendance Allowance
  • Carer's Allowance or Carer Support Payment
  • Employment and Support Allowance (support component / LCWRA)
  • Industrial Injuries Benefit
  • War Widow's Pension / Armed Forces Compensation

are exempt from the cap (SI 2016/909 reg.9). The model approximates this via the LCWRA flag.

11.3 Application

The benefit cap applies to the combined weekly value of:

  • UC (housing cost element only for UC claimants)
  • Housing Benefit
  • Child Benefit
  • Child Tax Credit
  • Working Tax Credit (if any)
  • Other specified benefits

Where the sum exceeds the cap, UC (or HB for legacy claimants) is reduced by the excess.

12. Scottish Child Payment

Primary authority

  • Social Security (Scotland) Act 2018 — asp/2018/9
  • Scottish Child Payment Regulations 2020 (SSI 2020/351) — ssi/2020/351
  • SSI 2025/100 reg.8 (up-rating, effective April 2025)

12.1 Eligibility

Source: SSI 2020/351 reg.18 (ssi/2020/351/regulation/18)

An individual is eligible for Scottish Child Payment if:

  • They are ordinarily resident in Scotland
  • They are responsible for a child under 16
  • They are in receipt of a qualifying benefit (UC, Income Support, HB, JSA, ESA, CTC, WTC, Pension Credit, or Scottish equivalents)

12.2 Amount

Source: SSI 2020/351 reg.20, as amended by SSI 2025/100 reg.8

Weekly rate per eligible child:

  • From November 2022: £25/week (extended to all under-16s)
  • From April 2025: £27.15/week (uprated by SSI 2025/100 reg.8)

Note: The current parameters/2025_26.yaml shows weekly_amount: 26.70, which reflects the pre-April-2025 rate. The correct 2025/26 value is £27.15/week per SSI 2025/100 reg.8.

13. Managed Migration to Universal Credit

Policy authority

  • Welfare Reform Act 2012 s.33 (power to migrate legacy claimants) — ukpga/2012/5/section/33
  • Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 (SI 2019/1152)

13.1 Model

Managed migration replaces legacy benefit entitlement with UC. The model treats it probabilistically: each legacy benefit has a uc_migration rate (fraction of the caseload migrated by the modelled year). Legacy benefit receipt is scaled by (1 − migration_rate); UC receipt is scaled by the reciprocal.

Migration rates (2025/26):

Legacy benefit Migration rate
Housing Benefit (working-age) 70%
Tax Credits (CTC/WTC) 95%
Income Support 65%

Pensioner HB claimants are never migrated (pensioners are ineligible for UC); they remain on HB indefinitely. This is handled by a separate pensioner_hb flag.

13.2 Transitional Protection

Legislation provides transitional protection (TP): where a UC award is lower than the legacy benefit it replaces, a TP element makes up the difference. The model does not currently model TP explicitly, which may understate UC amounts for recently migrated households.

14. Parameter Uprating

All benefit rates are increased annually by statutory orders. Key uprating mechanisms:

Benefit Uprating mechanism Typical measure
UC elements SI 2025/295 (Social Security Benefits Up-rating Order) CPI
Child benefit SI 2025/292 (Child Benefit Rates Order) CPI
State pension SI 2025/295 art.6 Triple lock (max of CPI, earnings, 2.5%)
Pension credit SI 2025/295 art.29 Earnings (guarantee); CPI (savings threshold)
NI thresholds Annual NI Contributions Regulations Statutory decision
Income tax PA/bands Annual Finance Act Frozen 2021–2028
Benefit cap Not uprated since 2016 —
Tax credits Not uprated since ~2016 (legacy only) —

Future-year parameters (2026/27 onward) are projected using OBR EFO March 2026 growth factors (CPI, earnings, GDP deflator) applied to the 2025/26 rates.

Appendix: Key Statutory Instruments for 2025/26

SI Title Relevance
SI 2025/295 Social Security Benefits Up-rating Order 2025 UC, state pension, pension credit, HB applicable amounts
SI 2025/292 Child Benefit (Rates) (Amendment) Regulations 2025 Child benefit rates
SI 2025/288 Social Security (Contributions) (Rates, Limits and Thresholds Amendments) 2025 NI thresholds/rates
SSI 2025/100 Social Security (Up-rating) (Scotland) Order 2025 Scottish child payment (£27.15/week)
ukpga/2025/11 National Insurance Contributions Act 2025 Employer NI rate 15%, ST £5,000
ukpga/2024/5 National Insurance Contributions Act 2024 Employee NI 8%, Class 4 6%, Class 2 abolished
ukpga/2021/26 Finance Act 2021 Personal allowance frozen at £12,570 to 2027/28
ukpga/2016/7 Welfare Reform and Work Act 2016 Two-child limit (UC and CTC)
ukpga/2014/19 Pensions Act 2014 New state pension
ukpga/2012/5 Welfare Reform Act 2012 Universal Credit, benefit cap
ukpga/2007/3 Income Tax Act 2007 PA, rates, marriage allowance
ukpga/2003/1 Income Tax (Earnings and Pensions) Act 2003 PAYE, HICBC
ukpga/2002/21 Tax Credits Act 2002 WTC and CTC
ukpga/2002/16 State Pension Credit Act 2002 Pension credit
ukpga/1992/4 Social Security Contributions and Benefits Act 1992 NI, child benefit, old state pension, IS, HB
uksi/2013/376 Universal Credit Regulations 2013 UC amounts, taper, work allowance
uksi/2006/213 Housing Benefit Regulations 2006 HB calculation
uksi/2002/2005 Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 WTC elements
uksi/2002/2007 Child Tax Credit Regulations 2002 CTC elements
uksi/1987/1967 Income Support (General) Regulations 1987 IS applicable amount
ssi/2020/351 Scottish Child Payment Regulations 2020 Scottish child payment eligibility and amount

Appendix B: Parameter Values by Year (2023/24 – 2029/30)

This appendix records the actual parameter values used in each fiscal year, their statutory source, and — for projected years — the methodology used to derive them.

Notes on sources and methodology

Confirmed years (2023/24 – 2025/26): all values cross-checked against the primary uprating SIs: SI 2023/233 and SI 2023/234 (2023/24); SI 2024/242 (2024/25); SI 2025/295 and SI 2025/292 (2025/26).

Projected years (2026/27 – 2029/30): generally derived from the OBR Economic and Fiscal Outlook March 2026 growth factor forecasts. Benefits uprated by September CPI; state pension by the triple lock (max of CPI, earnings, 2.5%); income tax thresholds frozen until 2027/28 then CPI-uprated. Scottish Child Payment follows the Scottish Fiscal Commission January 2026 forecast path already used in policyengine-uk.

Known modelling approximations:

  • 2023/24 NI main_rate 0.115 is represented as a fiscal-year blended annual rate to reflect the January 2024 mid-year cut from 12% to 10%

B.1 Income Tax

Personal Allowance and UK Bands

Parameter 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30
personal_allowance 12,570 12,570 12,570 12,570 12,570 12,815 13,076
pa_taper_threshold 100,000 100,000 100,000 100,000 100,000 100,000 100,000
pa_taper_rate 0.50 0.50 0.50 0.50 0.50 0.50 0.50
UK basic rate limit 37,700 37,700 37,700 37,700 37,700 38,435 39,218
UK higher rate (%) 40 40 40 40 40 40 40
UK additional rate threshold 125,140 125,140 125,140 125,140 125,140 127,580 130,090
dividend_allowance 1,000 500 500 500 500 500 500

Sources: ITA 2007 s.35 (PA); Finance Act 2021 s.5 (freeze to 2027/28); Finance Act 2023 (additional rate threshold £125,140); Finance Act 2022 (dividend allowance £500 from 2023/24 halved to £500 for 2023/24, further maintained).

Scottish Income Tax Bands (threshold above PA)

Band 2023/24 2024/25 2025/26
Starter (19%) £0 £0 £0
Basic (20%) £2,162 £2,306 £2,306
Intermediate (21%) £13,118 £13,991 £13,991
Higher (42%) £31,092 £31,092 £31,092
Advanced (45%) — £62,430 £62,430
Top (47%/48%) £125,140 (47%) £125,140 (48%) £125,140 (48%)

Notes: The Advanced rate band (45%) was introduced for 2024/25 by the Scottish Rate Resolution 2024. In 2023/24 there were only five bands (no Advanced rate; Top rate was 47%). 2026/27 onwards assumed unchanged from 2025/26 (no Scottish Parliament instrument available to confirm).

B.2 National Insurance

Parameter 2023/24 2024/25 2025/26 2026/27+
Employee PT (annual) 12,570 12,570 12,570 12,570†
Employee UEL (annual) 50,270 50,270 50,270 50,270†
Employee main rate 0.115‡ 0.08 0.08 0.08
Employee additional rate 0.02 0.02 0.02 0.02
Employer ST (annual) 9,100 9,100 5,000 5,000
Employer rate 0.138 0.138 0.15 0.15
Class 2 flat rate (weekly) 3.45 0.00 0.00 0.00
Class 2 SPT 6,725 0.00 0.00 0.00
Class 4 LPL 12,570 12,570 12,570 12,570†
Class 4 UPL 50,270 50,270 50,270 50,270†
Class 4 main rate 0.09 0.06 0.06 0.06
Class 4 additional rate 0.02 0.02 0.02 0.02

† PT/UEL/LPL/UPL resume CPI uprating from 2028/29. ‡ Blended rate: 12% April–January 2024, 10% January–April 2024.

Sources: SSCBA 1992 ss.5–15; NIC (Reduction in Rates) Act 2023 (10% from Jan 2024); NIC Act 2024 (8% employee, 6% Class 4, Class 2 abolished from April 2024); NIC Act 2025 (employer rate 15%, ST £5,000 from April 2025).

B.3 Universal Credit (monthly amounts)

Parameter 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30
Single under 25 292.11 311.68 316.98 327.76 334.32 341.01 347.83
Single 25+ 368.74 393.45 400.14 413.75 422.03 430.47 439.08
Couple under 25 458.51 489.23 497.55 514.46 524.82 535.32 546.02
Couple 25+ 578.82 617.60 628.10 649.46 662.55 675.81 689.33
Child element – first 315.00 333.33 339.00 350.53 357.60 364.75 372.05
Child element – subsequent 269.58 287.92 292.81 302.77 308.87 315.05 321.35
Disabled child – lower 146.31 156.11 158.76 164.16 167.47 170.82 174.24
Disabled child – higher 456.89 487.58 495.87 512.73 523.06 533.52 544.19
LCWRA element 390.06 416.19 423.27 437.66 446.48 455.41 464.52
Carer element 185.86 198.31 201.68 208.54 212.74 217.00 221.34
Taper rate 0.55 0.55 0.55 0.55 0.55 0.55 0.55
Work allowance – higher 631 673 684 707 721 735 750
Work allowance – lower 379 404 411 425 434 443 452

Sources (confirmed years): SI 2013/376 reg.36; SI 2023/233 Sch. (2023/24); SI 2024/242 art.32 and Sch.13 (2024/25); SI 2025/295 art.32 and Sch.13 (2025/26).

B.4 Child Benefit (weekly)

Parameter 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30
Eldest child 24.00 25.60 26.05 26.94 27.48 28.02 28.58
Additional children 15.90 16.95 17.25 17.84 18.20 18.56 18.94
HICBC threshold 50,000 60,000 60,000 60,000 60,000 60,000 60,000
HICBC taper end 60,000 80,000 80,000 80,000 80,000 80,000 80,000

Sources: SI 2006/965 reg.2; SI 2023/237 (2023/24); SI 2024/247 (2024/25); SI 2025/292 (2025/26). HICBC threshold raised from £50k to £60k (taper end £80k) by Finance Act 2024, effective 2024/25.

B.5 State Pension (weekly)

Parameter 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30
New state pension 203.85 221.20 230.25 240.81 248.44 254.65 261.02
Old basic pension 156.20 169.50 176.45 184.55 190.40 195.16 200.04
Triple lock measure used Earnings (+8.5%) Earnings (+8.5%) Earnings (+4.1%) Earnings (+4.6%) Earnings (+3.2%) 2.5% floor 2.5% floor

Sources: Pensions Act 2014 s.3; SSCBA 1992 Sch.4; SI 2023/234 (2023/24); SI 2024/242 (2024/25); SI 2025/295 art.6 (2025/26).

B.6 Pension Credit (weekly)

Parameter 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30
Standard minimum – single 201.05 218.15 227.10 237.52 242.30 247.15 252.18
Standard minimum – couple 306.85 332.95 346.60 362.52 369.83 377.23 384.92
Savings credit threshold – single 174.49 189.80 198.27 207.37 211.54 215.77 220.16
Savings credit threshold – couple 277.12 301.22 314.34 328.78 335.41 342.12 349.08

Sources: SPCA 2002 s.2; SI 2002/1792 reg.6; SI 2023/234 (2023/24); SI 2024/242 (2024/25); SI 2025/295 art.29 (2025/26).

B.7 Benefit Cap (annual)

Benefit cap amounts have been frozen since November 2016 under SI 2016/909. The earnings exemption threshold was raised from £7,400 to £10,152/year from April 2025.

Parameter 2023/24 2024/25 2025/26 2026/27+
Single – London 15,410 15,410 15,410 15,410
Single – outside London 13,400 13,400 13,400 13,400
Couple/family – London 23,000 23,000 23,000 23,000
Couple/family – outside London 20,000 20,000 20,000 20,000
Earnings exemption threshold 7,400 7,400 10,152 10,152

Source: SI 2016/909 reg.4 (cap amounts); reg.6 (earnings exemption). The £10,152 threshold was set by SI 2025/295 for 2025/26.

B.8 Housing Benefit Applicable Amounts (weekly)

These are the personal allowance components used in the HB means-test. Frozen at 2025/26 values in projections (HB is being phased out; rates not formally projected forward).

Parameter 2023/24 2024/25 2025/26
Single under 25 67.25 71.70 71.70
Single 25+ 84.80 90.50 90.50
Couple 133.30 142.25 142.25
Child allowance 77.78 83.73 83.73
Family premium 17.85 18.53 18.53

Source: SI 2006/213 Sch.3; uprated by SI 2023/233, SI 2024/242, SI 2025/295. Note: 2025/26 Scottish HB applicable amounts are higher (SSI 2025/24 reg.16 uprates to £72.90 / £92.05 / £144.65 for single under 25 / 25+ / couple respectively).

B.9 Tax Credits (annual, legacy — no new claimants)

Tax credits have not been uprated since 2016/17 (frozen at the rates below). The 2023/24, 2024/25 and future years values in the model all use the same frozen amounts.

Parameter All years (frozen)
WTC basic element 2,435
WTC couple element 2,500
WTC lone parent element 2,500
WTC 30-hour element 1,015
CTC child element (individual) 3,455
CTC family element 545
CTC disabled child element 4,170
CTC severely disabled child element 1,680
Income threshold 7,455
Taper rate 0.41

Note: In 2023/24, SI 2023/233 uprated WTC elements slightly. The 2023/24 YAML correctly shows the uprated values (e.g. WTC basic £2,280, CTC child £3,235) — these differ from 2024/25 onward because the 2024/25 freeze reset them. Check: the 2023/24 values were the last DWP uprating before the policy freeze was extended. From 2024/25 the amounts in the model are unchanged.

Actual 2023/24 values (from SI 2023/233):

Parameter 2023/24
WTC basic element 2,280
WTC couple element 2,340
WTC lone parent element 2,340
WTC 30-hour element 950
CTC child element 3,235
CTC family element 545
CTC disabled child element 3,905
CTC severely disabled child element 1,575
Income threshold 7,455

B.10 Scottish Child Payment (weekly)

Year Amount Source
2023/24 £25.00 SSI 2022/336 reg.4(6)(a) (raised from £20 to £25, extended to under-16s)
2024/25 £26.70 SSI 2023/354 reg.5
2025/26 £27.15 SSI 2025/100 reg.8 (current code shows £26.70 — bug)
2026/27+ £27.15 Assumed unchanged (no SSI available yet); model uses £26.70 — needs update

B.11 UC Managed Migration Rates (assumed — not statutory)

These fractions represent the estimated share of legacy claimants who have been migrated to UC by the end of each fiscal year. They are extrapolated from DWP published statistics and are not set by legislation.

Legacy benefit 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29+
Housing Benefit (working-age) 0.30 0.55 0.70 0.85 0.95 0.95
Tax Credits (CTC/WTC) 0.70 0.90 0.95 0.98 0.99 0.99
Income Support 0.30 0.50 0.65 0.80 0.90 0.90

Pensioner HB remains at 0 in all years (pensioners ineligible for UC).

B.12 OBR Growth Factors (FY averages, March 2026 EFO)

Used for benefit uprating projections in 2026/27 onwards.

Year CPI GDP deflator Earnings growth
2023/24 5.670% 5.298% 5.661%
2024/25 2.355% 4.040% 5.569%
2025/26 3.438% 3.239% 4.585%
2026/27 2.015% 2.006% 3.172%
2027/28 1.950% 1.942% 2.192%
2028/29 2.036% 1.865% 2.121%
2029/30 2.000% 1.864% 2.253%

Source: OBR Economic and Fiscal Outlook, March 2026, Table 1.7 (Inflation) and Table 1.6 (Labour Market).