Alcohol duty is not modelled: add the strength-banded rates and alcohol quantities to charge them on

[juaristi22]

What the engine does today

policyengine-uk charges no alcohol duty. The only alcohol variable is the household input alcohol_and_tobacco_consumption, a year's spending on alcohol and tobacco together. It counts towards consumption (and so full_rate_vat_consumption) and the carbon footprint, but no parameter covers alcohol duty and nothing turns spending into the litres of alcohol the duty is charged on. HOUSEHOLD_TAX_VARIABLES and gov_tax include fuel_duty and no other excise duty.

The law

Since 1 August 2023 alcohol duty has been charged per litre of pure alcohol under the Finance (No. 2) Act 2023, Part 2: section 47 imposes the charge, Schedule 7 sets the rates, Schedule 8 the reduced rates for qualifying draught products and Schedule 9 the small producer discount. The rate depends on the product and its strength. HMRC's rates from 1 February 2026, per litre of pure alcohol (Alcohol Duty rates):

• 1.3% to below 3.5% ABV, all products: £9.96 (£8.58 on draught)
• 3.5% to below 8.5%: beer £22.58 (£19.45 on draught); still cider £10.39 (£8.95 on draught); wine, spirits and other fermented products £26.61 (£19.45 on draught)
• 8.5% to 22%: £30.62
• above 22%: £33.99

Why it matters

• Budget decisions on alcohol duty cannot be scored: the annual uprating, changes to draught relief, and options others have costed, such as the minimum unit tax recorded in the scorecard's Autumn Budget 2025 registry (ab2025_option__alcohol_minimum_unit_tax, a pe_gap row that links to Port every Autumn Budget 2025 score into the scorecard, with pe_gap rows for what the engine cannot express policyengine-scorecard#136 for now).
• Household Budget calculators report it. Blick Rothenberg's Autumn Budget 2025 calculator, published by GB News and the Guardian on Budget day, asks for pints of beer and cider, glasses of wine and single spirits a week and reports the duty on them. PolicyEngine's household results cannot show that line.

Proposed change

• Parameters for the Schedule 7 rates by product and strength band and the Schedule 8 draught rates, from 1 August 2023, with legislation references. Small producer relief is a producer-side discount; leaving it out of household incidence at first is a documented simplification.
• Quantities to charge the duty on: household inputs for litres of beer, cider, wine and spirits a year, with default strengths as parameters (or litres of pure alcohol by product), and a draught share for beer and cider.
• A household alcohol_duty variable, assuming full pass-through to consumers, added to HOUSEHOLD_TAX_VARIABLES and gov_tax the way fuel_duty is.
• For microsimulation: split alcohol spending into quantities by product using prices, and check the total against HMRC's alcohol duty receipts (the Alcohol Bulletin). Survey spending on alcohol falls well short of receipts, so that check matters.

Part of the excise duties in #1775 (Workstream C). Related: #1114, the consumption response to direct-tax reforms, which would then reach excise duties as well as VAT.