Household excise duties

The model calculates alcohol duty, tobacco duty, vehicle excise duty on cars, and duty on LPG and natural road fuel gas from supplied household inputs. household_tax and gov_tax include these amounts once, alongside petrol and diesel duty. These totals combine the different annual bases described below. The incidence assumption is full pass-through to consumers.

Coverage and periods¶

Alcohol, tobacco and car duty calculations cover 2024/25 to 2026/27. The alcohol parameter history starts on 1 August 2023; the preceding alcohol regime and a complete 2023/24 calculation are outside this implementation. Tobacco rates start on 22 November 2023. The new alcohol, tobacco and car formulas return their default zero before 2024; that is an unmodelled period, not a statutory exemption. Gas duty covers 2022/23 onwards and includes the 1 January 2027 and 1 March 2027 increases. SI 2026/555 removed the September 2026 step announced at Budget 2025 and moved the December 2026 step to 1 January 2027. Rates after the last dated entry stay constant; the gas parameters do not forecast future inflation increases.

For alcohol and tobacco, a model year such as 2026 represents 6 April 2026 to 5 April 2027. Quantities and cigarette retail prices are constant across that year. Duty is calculated separately for every rate interval, then weighted by the interval’s share of the year. Tobacco Budget-day changes take effect at 18:00, while the 1 October 2026 change takes effect at midnight. Applying the cigarette minimum within each interval matters when the minimum begins or ceases to bind during the year.

These two rate nodes use preserve_calendar_dates: true to opt out of the usual conversion of government parameters to annual values. Their raw parameter values retain their actual dates; utils/excise.py performs the annual calculation. Value-level effective_time metadata records the Budget-day time. Annual Scenario.parameter_changes and bare-year legacy reform dictionaries apply to a complete UK fiscal year. Explicit date ranges retain the dates the caller supplies.

The linear fuel duty rates on petrol, diesel and road fuel gases use the existing fiscal_year_blend: true machinery. Each rate is keyed to the date it takes effect and day-weighted across the model year, 6 April to 5 April. Time of day is not modelled. Monthly fuel_duty allocates one twelfth of each annual volume and uses the model’s annual rate; it does not represent duty on a dated purchase.

Consequently, household_tax and gov_tax mix year bases. For model period 2026, alcohol, tobacco and fuel duty use 6 April 2026 to 5 April 2027, and VED uses 1 April 2026 to 31 March 2027. They are added to existing annual components, including income tax and VAT. Aggregation does not realign or prorate these components to a common reporting year. The totals therefore do not represent a consistent January-to-December receipts period. Before comparing gov_tax with calendar-year receipts, align each component to that calendar year; changing the total’s year label alone does not perform that conversion.

Alcohol inputs¶

For each of beer, cider, sparkling_cider, wine, spirits, and other_fermented, supply household inputs:

• <product>_litres: litres of the drink bought over the year, default zero.

• <product>_abv: strength as a fraction, for example 0.05 for 5%.

• <product>_draught_share: the fraction qualifying for statutory draught relief, default zero. This should reflect qualifying containers and dispensing, not simply where the household drinks the product.

Default strengths are illustrative assumptions in household.consumption.alcohol, not population averages: beer 4%, cider and sparkling cider 4.5%, wine 12%, spirits 40%, other fermented products 5%. Override them for a known product. Each product input represents one strength; where a household buys products spanning multiple rate bands, calculate the components separately or supply the summed product duty.

The product definitions are the statutory categories. For example, fruit ciders that do not qualify as cider belong under other_fermented. The model covers Schedule 7 strength bands, Schedule 8 draught rates, the sparkling-cider 5.5% boundary, and the temporary wine-strength easement ending on 1 February 2025. Small producer relief and demand responses are excluded.

The result alcohol_duty sums the six product-duty outputs. In 2026/27, 100 litres of 5% beer gives £112.90 with no draught relief, or £97.25 when all of it qualifies for draught relief.

Sources: HMRC Alcohol Duty rates and historic rates.

Tobacco inputs¶

Supply household cigarettes_per_week, cigarette_price_per_pack, and any of hand_rolling_tobacco_grams_per_week, cigars_grams_per_week, other_tobacco_grams_per_week, and heated_tobacco_grams_per_week. Weekly quantities are annualised with the model’s 52-week convention. Prices refer to twenty cigarettes. The default price uses the ONS 2024 calendar-year average of £15.85 and stays constant thereafter; supply the actual price when available. The default is a data assumption, not a tax parameter.

tobacco_duty applies the higher of specific-plus-ad-valorem duty and minimum duty to cigarettes, plus weight-based duty on other products. Specific and minimum cigarette parameters are stored in pounds per cigarette; other specific rates are pounds per kilogram. Vaping products duty is outside this implementation.

Sources: HMRC Tobacco Products Duty rates and ONS cigarette price series CZMP.

Car inputs¶

Supply one car for each person who keeps a car:

• car_first_registration_date, formatted YYYY-MM-DD.

• car_co2_emissions, in g/km.

• car_fuel_type: PETROL, DIESEL_RDE2, DIESEL_NON_RDE2, ALTERNATIVE_FUEL (including hybrids and LPG), or ELECTRIC (including other zero-emission cars).

• car_list_price, the original list price before discounts.

• car_engine_size, in cc, for cars first registered before 1 March 2001.

• car_is_ved_exempt, for an applicable exemption, including an eligible historic or disabled person’s vehicle.

Without a registration date the result is zero. num_vehicles and owns_vehicle do not create a taxable car, since they cannot identify its schedule. car_vehicle_excise_duty computes each person’s charge; vehicle_excise_duty aggregates them within the household.

The calculation assumes one twelve-month licence in each VED rate year (1 April to 31 March), with uninterrupted annual renewals from first registration. It charges the full first licence in the registration year and then the annual renewal; it does not spread that first licence across tax years. It excludes partial-year ownership, refunds, instalment surcharges, changes of tax class and the 50% disability reduction. A person with more than one car can supply their combined car_vehicle_excise_duty directly.

The schedules cover engine size before March 2001; CO2 bands from March 2001 to March 2017, including the pre-23 March 2006 band-K cap; and first-year and standard rates from April 2017. The expensive-car supplement applies during the next five annual licences. Its zero-emission threshold rises to £50,000 from 2026/27, including cars registered in 2025/26; zero-emission cars registered before April 2025 remain exempt from the supplement. The 2024/25 zero-emission exemption and alternative-fuel discount are also represented. Vans, motorcycles and the proposed electric-vehicle mileage charge are outside this implementation.

Sources: DVLA vehicle tax rate tables, Budget 2025 rate tables, and zero-emission vehicle guidance.

Road fuel gas inputs¶

Supply annual household lpg_kg and natural_gas_kg. Natural gas includes biogas used as road fuel, not domestic heating. The inputs are kilograms, matching the legislation. No universal litre-to-kilogram density is assumed. The existing fuel_duty output includes these charges. Rural fuel duty relief continues to apply only to petrol and diesel.

From 1 March 2027 onwards, the gas parameters hold LPG at £0.3161/kg and natural gas at £0.2470/kg. This implementation stops at the last numerical rates in the HMRC 2026-to-2027 schedule and does not extrapolate gas rates using an inflation forecast. This is a modelling limitation: HMRC states that RPI uprating resumes from 2027/28. The petrol and diesel rate includes forecast RPI uprating each 1 April from 2027, so its rates rise while the gas rates stay flat. Later-year gas duty is therefore lower than it would be under the same uprating assumption. Analyses beyond March 2027 that require consistent fuel-duty forecasts must supply an uprated gas-rate path explicitly.

Sources: HMRC fuel duty rates 2026 to 2027 (RPI uprating from 2027/28), HMRC amended fuel duty rates 2026 to 2027 and SI 2026/164 as amended by SI 2026/555.

Petrol and diesel rate¶

The main rate on unleaded petrol and diesel is keyed to each statutory change: 52.95p a litre from 23 March 2022, continued by annual orders to 31 December 2026; 55.95p from 1 January 2027 (SI 2026/164 as amended by SI 2026/555); and the Hydrocarbon Oil Duties Act 1979 rate of 57.95p from 1 March 2027. Budget 2025 states that rates will be uprated by RPI from April 2027, and HM Treasury’s Budget 2025 costing dates this from 1 April 2027. That uprating is policy, not law: HMRC’s amended note of 22 May 2026 says final rates will be confirmed at Budget 2026. No official source names the RPI measure. The model applies the previous calendar year’s RPI growth from the OBR forecast in gov.economic_assumptions.yoy_growth.obr.rpi on each 1 April, rounded to the nearest hundredth of a penny. The steps to 1 April 2031 are written out by calculate_fuel_duty_rates.py, and a test fails when they fall out of date with the RPI forecast. Later steps come from the parameter’s uprating metadata. The RPI index ends in 2039, so the last step is 1 April 2040.

An annual reform names a model year and replaces the rate for all of it. For model years to 2030 it leaves other years unchanged. Scenario.parameter_changes reapplies uprating after the change, so an override from model year 2031, where the steps come from uprating metadata, restarts uprating from the last written rate: every later year stays one 1 April step behind. Reform classes and legacy reform dictionaries change the annual values after uprating and are not affected.

Population data follow-ups¶

These formulas do not impute quantities or vehicle characteristics from the existing combined alcohol_and_tobacco_consumption, fuel expenditure or vehicle counts. Missing new inputs therefore contribute zero duty. Program metadata marks alcohol, tobacco and vehicle excise duty as partial coverage. National revenue estimates and distributional results require a separate data change:

1. Split alcohol and tobacco expenditure into products, including alcohol purchased in hospitality venues. Derive quantities using independently measured prices and strengths, retaining the original total expenditure.

2. Validate weighted totals against the HMRC Alcohol Bulletin and Tobacco Bulletin. Record the fiscal year, population coverage, under-reporting adjustment, non-household purchases and cross-border differences before comparing totals.

3. Impute car characteristics jointly, preserving vehicle counts and ownership, using National Travel Survey or DVLA licensing data. Retain the registration, emissions, fuel and price correlations that determine the duty.

4. Identify road fuel gas consumption separately from petrol and diesel; do not allocate the same fuel spending to both.

Until these inputs are available, these additions support household calculations and reforms on supplied quantities, not validated national revenue estimates.