The petition – which was launched by Denver Johnson on Boxing Day – says the current Personal Allowance level has been kept “unreasonably low at the expense of the poorest, most needy people in our society”
A petition calling for the Personal Allowance from £12,570 to £45,000 has hit 10,000 signatures meaning the Labour government will need to respond.
The petition – which was launched by Denver Johnson on Boxing Day – says the current Personal Allowance level has been kept “unreasonably low at the expense of the poorest, most needy people in our society”.
The Personal Tax Allowance is the amount of income you earn every year without having to pay tax on it. In the UK, it currently sits at £12,570. This means you can earn up to this amount before having to pay tax. If you earn over, you pay the basic rate of tax – which is 20% – on the amount over it. For example, if you earn £14,000 a year you will pay tax on £1,430.
There are then further levels for higher incomes. In England and Wales, you start paying the “higher” tax bracket of 40% on earnings over £50,271. Finally, if you earn over £125,140 a year, you will pay the “Additional” tax rate at 45%.
It’s important to remember that tax bands are different in Scotland. There are seven tax bands, including the Personal Allowance for Scottish earnings. The petition argues that £45,000 is a “more realistic” figure as it would see those earning more pay more tax. It explained: “We feel that the poorer majority should pay substantially less than the wealthy. We think that the tax system seems designed to make the divide between rich and poor increase exponentially.”
The petition’s 10,400 signatures require the government to issue a formal response, which it has yet to do as of this writing. If the petition reaches 100,000 signatures, it will be considered for debate in Parliament. All petitions posted on the petitions-parliament website run for six months, with this one going until May 26. If it hasn’t reached 100,000 signatures by then, it will not be considered.
In the recent budget, Chancellor Rachel Reeves announced that the UK would not extend the freeze on income tax and National Insurance thresholds past 2027/28. The bands were frozen initially in 2022 by former Tory Prime Minister and Chancellor Rishi Sunak and in the budget last year, the current Chancellor said it would “hurt working people” to keep thresholds frozen. In the 2028/29 tax year, the bands will rise – including the Personal Allowance threshold – by inflation. It is not yet certain how much the bands will rise by.
When tax bands are frozen, more people are dragged into paying taxes as their wages rise. This is called “fiscal drag”, as more of your wages end up being subject to tax without tax rates actually rising. Before the recent budget, the Institute for Fiscal Studies previously estimated that 400,000 would have been dragged into paying Income Tax for the first time, while another 600,000 people would have started paying the higher and additional rates.
Tax thresholds in England and Wales 2024/25
- Personal Allowance – Up to £12,570 – tax rate: 0%
- Basic Rate – £12,571 to £50,270 – tax rate: 20%
- Higher Rate – £50,271 to £125,140 – tax rate: 40%
- Additional Rate – over £125,140 – tax rate: 45%