Overview
- A Parliament petition titled "Raise the personal tax allowance to £18,000" passed 10,000 signatures, which now requires a formal Treasury reply and sets a path to a Commons debate at 100,000 signatures.
- The personal allowance has been fixed at £12,570 since 2021 under a policy extended by Chancellor Rachel Reeves to the 2030/31 tax year.
- Fiscal drag, which happens when pay rises push people into tax without higher thresholds, is pulling more low and middle earners into income tax and higher bands.
- The Office for Budget Responsibility projects more than £55 billion in revenue in 2030/31 from holding thresholds steady, while the Resolution Foundation says working-age households will be about £500 worse off on average over the next year.
- Treasury minister James Murray warns that raising thresholds would strain the public finances, and a previous petition to lift the allowance to £20,000 drew 281,792 signatures and a debate where officials put the cost near £50 billion.