The debate over the UK’s personal tax allowance is gaining traction as a petition calling for an increase to £20,000 gathers significant support. According to DevonLive, more than 206,742 people have signed, far exceeding the threshold for parliamentary discussion.
With the Spring Statement approaching, attention is turning to the government’s stance on frozen tax thresholds. While calls for change grow, it remains unclear whether any adjustments will be made to ease the financial strain on lower-income earners.
Push for Tax Relief for Low Earners and Pensioners
The petition, launched by Alan David Frost, argues that a higher tax-free allowance would help low earners reduce their reliance on benefits and ensure pensioners receive fairer treatment. Since 2021, the threshold has remained unchanged, increasing the tax burden on lower-income workers through fiscal drag.
It states :
Raise the income tax personal allowance from £12,570 to £20,000. We think this would help low earners to get off benefits and allow pensioners a decent income.
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.
Political Debate and Government Response
During Prime Minister’s Questions, Conservative leader Kemi Badenoch challenged Keir Starmer on whether Labour would uphold the promise to end the freeze on tax thresholds.
She asked :
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.
Ahead of the emergency budget, will he repeat the commitment that she made?
Starmer avoided a direct response, instead emphasizing Labour’s achievements :
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.
Following the exchange, a Conservative spokesperson warned of potential tax increases :
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.
Fiscal Implications and Government Stance
The Treasury has confirmed that there are no plans to raise the personal allowance due to the significant fiscal impact. A spokesperson reiterated :
The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility.
Further elaborating on the economic concerns, they added :
Increasing the Personal Allowance to £20,000 would come at a significant fiscal cost of many billions of pounds per annum.
This would reduce tax receipts substantially, decreasing funds available for the UK’s hospitals, schools, and other essential public services. 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 maintains that all tax policies remain under review :
The Chancellor will announce any changes to the tax system at fiscal events in the usual way.
The Impact of Frozen Tax Thresholds
With personal allowance levels unchanged since 2021 and scheduled to remain frozen until at least April 2028, millions of workers are paying more tax as wages rise. Currently:
- Income above £12,570 is taxed at 20%.
- Income above £50,270 is taxed at 40%.
With the rise in living costs, the petition highlights growing public frustration over the Tax Allowance threshold. While Labour has ruled out extending the freeze, the introduction of tax relief measures in the Spring Statement remains uncertain.
