A fresh campaign demanding the personal allowance be raised to £20,000 is gathering momentum. The current personal allowance stands at £12,570, which means you can earn up to this figure without paying income tax. Should the allowance be lifted to this level, a basic rate taxpayer earning £20,000 or more would pay £1,486 less income tax annually.
Reform UK has previously backed such an increase. A petition to Parliament calling for the uplift has already attracted 5,900 signatures at the time of writing.
Should it reach 10,000 signatures, the Government will be required to provide a response. The message states: “This would help with increasing rent, mortgages, council tax, and gas and electric bills.
“Some families can’t afford to go back to work after children due to childcare costs wiping their whole income. We think that we are currently paying ridiculous amounts of tax, and that minimum wage isn’t even enough to support an average family.
“We believe that this would lead to a massive increase on people willing to look for work, instead of people not wanting to, due to it being too expensive to now live.” Should the petition reach 100,000 signatures, the matter will be considered for debate in Parliament.
A previous petition calling for the personal allowance to rise to £20,000 gathered more than 280,000 signatures, triggering a debate in May. Treasury minister James Murray said during the debate: “I recognise the views of everyone who has put their name to the petition, and let me be clear that, as a Government, we want taxes on working people and on pensioners, who have worked hard all their lives, to be as low as possible.
“We were elected to put more money in people’s pockets and, crucially, we were elected to do so in a fiscally responsible way. That is a critical point to understand.
“We want to keep taxes on working people and pensioners as low as possible, but if we were to follow the calls of some Opposition parties and abandon fiscal responsibility, it would lead to economic chaos and the collapse of public services, and that would harm working people and pensioners the most.”
The personal allowance reduces once you earn more than £100,000. It falls by £1 for every £2 you earn beyond this threshold, meaning you get no allowance whatsoever once your income hits £125,140.
