A campaign to increase the personal tax allowance for the lowest earners from £12,570 to £20,000 has reached a significant milestone as a massive petition surpassed the 200,000 signatures mark.
Ahead of Chancellor Rachel Reeves’ Spring Statement on March 26, there have been mounting calls for the threshold, which has remained static since 2021, to be lifted.
The petition on the Parliament website today soared to 206,742 signatures – well over twice the amount required to trigger a debate in the House of Commons. Although no date has been scheduled for the debate yet, the groundswell of support is ramping up the pressure on the Labour government to act.
The petition, initiated by Alan David Frost and accessible here, states: “Raise the income tax personal allowance from £12570 to £20000. We think this would help low earners to get off benefits and allow pensioners a decent income.”
It further argues: “We think it is abhorrent to tax pensioners on their state pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth.”
Amidst growing pressure, Tory leader Kemi Badenoch questioned Labour leader Sir Keir Starmer during today’s Prime Minister’s Questions. Ms Badenoch, the Conservative leader, challenged the Prime Minister to recommit to not prolonging the freeze on income tax before the upcoming spring statement.
During the autumn budget revelation, Rachel Reeves chose not to carry on with holding the thresholds fixed for income tax bands. The threshold freeze initially put in place by the previous Tory government was set to last until April 2028.
Addressing Parliament on Wednesday, Mrs Badenoch remarked: “The Chancellor promised a once-in-a-parliament budget that she would not come back for more. And in that budget, she said there will be no extension of the freeze in income tax thresholds.”
In response to a question about maintaining this stance ahead of the impending emergency budget, Sir Keir stated: “This Government has already delivered two million extra NHS appointments, 750 breakfast clubs, record returns of people who shouldn’t be here, and a fully-funded increase in our defence spending. That is the difference that a Labour Government makes.”
Post-PMQs, according to a Conservative party representative, it appears that “the only logical conclusion is that at next week’s emergency budget, Labour are plotting stealth taxes to drag more people into paying higher tax rates”.
Since the threshold was frozen in 2021, millions of low-income earners have been brought into the income tax bracket through ‘fiscal drag’. At present, anyone with an income exceeding £12,570 is subject to a 20% tax rate on their earnings.
According to the Treasury, there are currently no plans to provide additional financial support for workers as suggested. A spokesperson stated: “The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility.”
They continued: “The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. The Government has no plans to increase the Personal Allowance to £20,000. Increasing the Personal Allowance to £20,000 would come at a significant fiscal cost of many billions of pounds per annum.
“This would significantly reduce tax receipts, decreasing funds available for the UK’s hospitals, schools, and other essential public services that we all rely on. It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible.
“The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.”
Taxpayers are bracing for a financial squeeze as tax thresholds remain unchanged amidst escalating living costs. The basic 20% tax commences at £12,570 and the 40% band at £50,270 earnings, with both figures having been frozen since 2021.
To view the petition, click here.
