Pressure mounts on chancellor to raise income tax threshold – need to know
- A campaign demanding Chancellor Rachel Reeves raise the income tax threshold to £18,000 has gained momentum after forcing a Treasury response.
- The petition has reached 15,764 signatures and could trigger parliamentary debate if it hits 100,000. Millions face extra tax due to the threshold freeze at £12,570 until 2031, with Britain’s most vulnerable workers bearing the brunt.
- The Treasury firmly rejected the proposal, stating: “The Government currently has no plans to increase the Personal Allowance to £18,000. Increasing the Personal Allowance to £18,000 would come at a significant fiscal cost of over £40 billion per year.”
- Minimum wage workers will pay an extra £137 annually by 2030 due to the prolonged freeze. The Office for Budget Responsibility estimates the threshold freeze will raise over £55 billion by 2030/31.
- Earlier petitions calling for a £20,000 threshold attracted 281,792 signatures, becoming one of Parliament’s most-signed campaigns. The Resolution Foundation warns working-age households face a “triple hit” from taxation, utility bills and council tax rises.
- Families will be around £500 worse off due to the personal tax allowance freeze, with the bottom 10 per cent of earners hit hardest.
READ THE FULL STORY: Big update on £18,000 tax threshold change as Rachel Reeves forced to respond