New update on calls to increase personal tax allowance from £12,570 to £45,000
The UK Government has rejected proposals in an online petition calling for the Personal Allowance to increase from £12,570 to £45,000. More than 32,700 people have shown support for the change, however, in a written response, the Treasury said such an increase would cost more than £270 billion over the next three years and reduce the amount of funds available for public services.
Petition creator Denver Johnson argued that the current income tax threshold “has been kept unreasonably low for far too long, at the expense of the poorest, most needy people in our society”. However, the Treasury highlighted how the previous Conservative government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028.
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The Treasury response continued: “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.
“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. 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.”
However, it added that the UK Government “keeps all taxes under review as part of the policy making process”.
At 100,000 signatures of support the petition would be considered by the Petitions Committee for debate in Parliament, you can view the full response here.