Personal tax allowance £20,000 call hits major threshold as Keir Starmer questioned
A campaign to increase the personal tax allowance from £12,570 to £20,000 has gained significant momentum, with a petition surpassing 200,000 signatures. This milestone means the issue will now be debated in the House of Commons, putting pressure on the Labour government to address the concerns of low earners and pensioners.
The petition, launched by Alan David Frost, argues that raising the personal allowance would help low earners move off benefits, provide pensioners with a more livable income, and stimulate economic growth by injecting more cash into the economy. It also criticizes the current system for taxing pensioners on their state pension when it exceeds the personal allowance.
The campaign comes ahead of Chancellor Rachel Reeves’ Spring Statement on March 26, with growing calls to address the frozen income tax thresholds, which have remained unchanged since 2021. The freeze has dragged millions of low-income earners into the tax bracket through “fiscal drag,” where inflation pushes wages into higher tax bands without actual increases in real income.
During Prime Minister’s Questions, Conservative leader Kemi Badenoch challenged Prime Minister Sir Keir Starmer to confirm that Labour would not extend the freeze on income tax thresholds. Starmer responded by highlighting the government’s achievements, such as increasing NHS appointments and defense spending, but did not directly address the tax threshold issue.
A Conservative spokesperson suggested that Labour might be planning stealth taxes to increase revenue, warning that any changes to the tax system would be announced during fiscal events. The Treasury has stated that there are no plans to raise the personal allowance to £20,000, citing the significant fiscal cost and the need to maintain funding for essential public services.
As living costs continue to rise, taxpayers face a financial squeeze, with the basic 20% tax rate starting at £12,570 and the 40% rate at £50,270. The petition’s success reflects widespread public concern over the impact of frozen tax thresholds on household finances.
