Chancellor Rachel Reeves is set to make her spring statement next week amid growing pressure over tax threshold freezes, with a campaign demanding an increase in the income tax threshold piling pressure on her to revisit the personal tax allowance for Britain's lowest-paid workers. Concerns are mounting that millions of additional people, including many of the country's poorest earners, have been dragged into the tax net through 'fiscal drag'. The basic income tax threshold has remained frozen at £12,570 since 2021, while inflation, which directly affects wages, has been rising sharply.
Some of Britain's most financially vulnerable workers face being taxed the moment their earnings exceed £12,570, and because the threshold has remained unchanged, inflation and wage growth mean that considerably more people are now liable for tax than would otherwise have been the case had it risen in line with historical precedent. A petition on the Parliament website calling on the Government to raise this threshold has gathered 89,475 signatures, obliging the Treasury to formally issue a response. Should the petition reach 100,000 signatures, a Parliamentary debate could be triggered, intensifying pressure on Ms Reeves to implement changes in the November Budget.
Campaigners must move swiftly to meet the target, with merely 3 days remaining until the deadline of February 28. The petition was launched by Shannon Keene. The issue has generated several petitions, illustrating the intensity of public feeling across the country.
Earlier in the year, one appeal calling for the threshold to rise to £20,000 amassed a remarkable 281,792 signatures on the Parliament platform before being closed to further support during the summer months, which prompted a Westminster debate wherein the Treasury estimated the financial impact at £50 billion. Highlighting the extent of public anxiety, a new petition has subsequently emerged pressing for the income tax personal allowance to increase from £12,570 to £20,000. The earlier petition's position amongst the most signed in the parliamentary website's history was interpreted by activists as compelling evidence of widespread public sentiment regarding this issue.
At present, a standard tax rate of 20 per cent applies.