Rachel Reeves has been urged to raise personal tax thresholds (Image: Getty)
MPs intervened as public pressure mounts on Chancellor Rachel Reeves to increase the personal tax allowance from ￡12,570 to a staggering ￡45,000. The current threshold, frozen since 2021, has resulted in some of the UK's lowest earners paying more income tax.
A petition on the Parliament website, which has amassed 43,626 signatures, is challenging what many see as an 'unjust' tax hike, often referred to as 'fiscal drag' - and got a response from the Government. However an influential committee decided the Treasury response was inadequate and has ordered a new response to answer the questions in a strong rebuke.
by Taboola by Taboola
Sponsored Sponsored
Promoted Links Promoted Links
Get started today!Interactive Brokers Learn More
Undo
Denver Johnson, the petitioner, stated: "The Personal Allowance is the amount of income a person can get before they pay tax. It stands at ￡12,570 in 2024. We would like the standard Personal Allowance raised to what we think is a more realistic figure of ￡45,000."
DON'T MISS
Powered by
The incredible railway plan that will place carers aboard of trains to attract tourists
1 Comments
The UK's richest person worth ￡14bn - so secretive his receptionist doesn't know who he is
4 Comments
British politicians need to wake up and have courage to learn lessons of German election
20 Comments
The UK's 'poorest' county with 'no jobs' but everyone thinks it's one of the richest
2 Comments
Cash ISA savers with Santander, Barclays, Lloyds, NatWest warned of little-known rule
Comments
NatWest customers can hit ￡780 by end of 2025 using 1 savings account method
2 Comments
Plan to raise tax allowance from ￡12,570 to ￡45,000 update as MPs demand new statement
6 Comments
Going away on a cruise or long holiday could invalidate your home insurance
Comments
Savers urged to max out this allowance and you could get extra ￡690,0000 tax-free
2 Comments
Major energy firm offers 16 hours of free electricity - see if you can apply
Comments
Biggest threat to our pensions is ticking time bomb - and it's not Rachel Reeves
17 Comments
Building society boss in devastating verdict on Rachel Reeves ISA 'threat'
14 Comments
NatWest offers mega mortgages - but there's a warning
1 Comments
British Gas makes major change to scheme giving ￡1,700 to customers
1 Comments
Vplus 专才进修资助 资助高达60% 上限HK$45,000 / HK$36,000Vplus 辨事处 了解更多
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Full list of tax raids Rachel Reeves could unleash on in days - ISAs to pensions
Comments
Millions of workers urged to check payslip code over HMRC refund
Comments
男孩以为自己救了狗，得知真相後脸色惨白Daily-Tales.com 阅读更多
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Asylum and refugee costs could devour third of UK aid budget
31 Comments
TSB Bank shares pros and cons of ISA types to help Britons 'get most' out of savings
Comments
Remember Tiger Woods Ex wife Try Not To Smile When You See Her NowBeach Raider
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
State pensioners urged to check records to get ￡2,750 boost before deadline date
Comments
China's 11 cities so big they've all merged into 1 mega-city of 70m - more than UK
Comments
After Losing Weight Kevin James Looks Like A ModelOld Money Style
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
The incredible railway plan that will place carers aboard of trains to attract tourists
1 Comments
The UK's richest person worth ￡14bn - so secretive his receptionist doesn't know who he is
4 Comments
Kevin James Reveals His Wife And You'll Easily Recognize HerThe Latest Article
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
British politicians need to wake up and have courage to learn lessons of German election
20 Comments
The UK's 'poorest' county with 'no jobs' but everyone thinks it's one of the richest
2 Comments
Dana Delany, 68, Shows Off Her Perfect Figure In A New PhotoReportingly
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Cash ISA savers with Santander, Barclays, Lloyds, NatWest warned of little-known rule
Comments
NatWest customers can hit ￡780 by end of 2025 using 1 savings account method
2 Comments
Scarlett Johansson, 40, Shows Off Her Actual Size In A New PhotosThe Latest Article
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Plan to raise tax allowance from ￡12,570 to ￡45,000 update as MPs demand new statement
6 Comments
Going away on a cruise or long holiday could invalidate your home insurance
Comments
医师「涂抹後斑点就会消失喔」40多岁女性的脸1个月就激变japonelifeskeem-hk.com 了解更多
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Savers urged to max out this allowance and you could get extra ￡690,0000 tax-free
2 Comments
Major energy firm offers 16 hours of free electricity - see if you can apply
Comments
请不要吃以下的7种食物！它们是会致癌的Health 24/7
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
Biggest threat to our pensions is ticking time bomb - and it's not Rachel Reeves
17 Comments
Building society boss in devastating verdict on Rachel Reeves ISA 'threat'
14 Comments
机电工程署「技术员训练计划」现正招聘。截止申请日期：3月10日机电工程署 了解更多
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
NatWest offers mega mortgages - but there's a warning
1 Comments
British Gas makes major change to scheme giving ￡1,700 to customers
1 Comments
Full list of tax raids Rachel Reeves could unleash on in days - ISAs to pensions
Comments
Millions of workers urged to check payslip code over HMRC refund
Comments
Asylum and refugee costs could devour third of UK aid budget
31 Comments
TSB Bank shares pros and cons of ISA types to help Britons 'get most' out of savings
Comments
State pensioners urged to check records to get ￡2,750 boost before deadline date
Comments
China's 11 cities so big they've all merged into 1 mega-city of 70m - more than UK
Comments
The incredible railway plan that will place carers aboard of trains to attract tourists
1 Comments
The UK's richest person worth ￡14bn - so secretive his receptionist doesn't know who he is
4 Comments
British politicians need to wake up and have courage to learn lessons of German election
20 Comments
The UK's 'poorest' county with 'no jobs' but everyone thinks it's one of the richest
2 Comments
Cash ISA savers with Santander, Barclays, Lloyds, NatWest warned of little-known rule
Comments
NatWest customers can hit ￡780 by end of 2025 using 1 savings account method
2 Comments
Plan to raise tax allowance from ￡12,570 to ￡45,000 update as MPs demand new statement
6 Comments
狗狗不肯让宝宝一个人睡——父母知道原因后，立刻报警了有趣事实
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
狗狗不让宝宝一个人睡觉——父母终於发现了原因！有趣事实
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
每天喝苹果醋的7大好处：身体会感谢你的有趣事实
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
退休医生坦言：寿命长不是靠多走路和多睡觉，而是坚持这2件小事TopManFun
Undo
by Taboola by Taboola
Sponsored Links Sponsored Links
Promoted Links Promoted Links
He further argued: "We think that the Personal Allowance, as termed by the government, has been kept unreasonably low for far too long, at the expense of the poorest, most needy people in our society. 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."
Since 2021, the income tax threshold has been frozen, dragging millions of low earners into the tax net through 'fiscal drag'. The basic 20% tax rate kicks in at ￡12,570, while the higher 40% rate starts at ￡50,270 – both thresholds have remained unchanged since 2021.
Sponsored
PaperelaRemember Tiger's Ex-Wife? Try Not To Smile When You See Her Now
Undo
by Taboola by Taboola
Experts estimate that by the end of the freeze in 2028, this will have raised ￡1.2 billion for the Treasury. This phenomenon, known as 'fiscal drag', results in more individuals being liable for taxation or moving into higher tax bands, with analysts highlighting the particular burden on those with lower incomes.
READ MORE Rachel Reeves urged to raise personal allowance to shield pensioners
Earlier this month, the Treasury addressed a petition on the matter, but an influential committee of MPs has now deemed their response insufficient, failing to tackle the core concerns – they've demanded a more satisfactory government reply. The Petitions Committee, the group of MPs managing the petitions system, "has considered the Government's response to this petition. They felt the response did not respond directly to the request of the petition. They have therefore asked the Government to provide a revised response."
The petition on the parliamentary website, having surpassed 10,000 signatures, was due a response and has now received one from the Treasury, which is currently under scrutiny. The Treasury stated: "The Government has not extended the last Government's freeze on personal tax thresholds, meaning from April 2028 working people will keep more of their earnings as thresholds will rise by inflation."
They further clarified, "The previous Government made the decision to freeze the income tax Personal Allowance (PA) at its current level of ￡12,570 until April 2028. The current Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. As a result, they will rise with inflation from April 2028, meaning working people will keep more of their earnings.
READ MORE HMRC warning as people urged to check new tax code
SUBSCRIBE Invalid email
We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy
"Increasing the Personal Allowance to ￡45,000 would come at a significant fiscal cost of more than ￡270 billion per annum on average over the next three years (based on HMRC's ready reckoners, published here). This would reduce tax receipts substantially, decreasing funds available for the UK's hospitals, schools, and other essential public services that we all rely on. 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 keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way."
To view the petition click here.