𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Support has soared for a fresh campaign urging Chancellor Rachel Reeves to raise the lowest income tax threshold to £18,000. A new petition on the parliament website has witnessed backing soar since its launch and today hit a ket target — pressing Ms Reeves to reverse her decision to freeze the lowest income tax threshold of £12,570 until 2031.

In the November budget, Chancellor Rachel Reeves extended the tax threshold freeze to 2031. For the 2026/27 tax year, the standard UK Personal Allowance remains frozen at £12,570, meaning no income tax is paid on earnings up to this amount.

Some of Britain’s most financially vulnerable workers face taxation the moment their earnings exceed that figure — and because it 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.

Today, the petition surged past 10,000 signups, triggering a formal response from the Treasury, which will have to set out its policy position and whether any amendments could be made. Should it reach 100,000, it will be put forward for consideration in a parliamentary debate

The petition, which can be viewed here, said: “Raise the personal tax allowance to £18,000. Since 2021 personal tax allowance has been frozen at £12,570. This freeze was due to expire this year but the Chancellor of the Exchequer has extended it to 2031. We want to keep some more of our own money.

“If you are earning minimum wage then you may soon be paying tax because of fiscal drag. Some higher earners pay little or no tax due to clever use of accounting rules. We think this is so wrong.”

The impact of the tax threshold freezes has been scrutinised by the Office for Budget Responsibility (OBR), with the latest estimate suggesting that the freeze of income tax thresholds until 2030/31 will raise over £55 billion in 2030/31.

Following the most recent extension, the Guardian reported that, due to the prolonged freeze, a full-time worker on the minimum wage would pay an extra £137 a year by 2030.

Projections suggest that by 2027, the new state pension will exceed this figure owing to the triple lock mechanism, leaving pensioners at risk of facing steeper tax bills. The issue has sparked a wave of petitions, highlighting the depth of public concern across the country. Earlier this year, one campaign calling for the threshold to be raised to £20,000 amassed an impressive 281,792 signatures on the Parliament platform before being closed to further support during the summer.

This prompted a Westminster debate in which the Treasury put the financial cost at £50 billion. Highlighting the scale of public discontent, a new petition has since been launched calling for the income tax personal allowance to increase from £12,570 to £20,000. Campaigners regarded the earlier petition’s position among the most signed in the parliamentary website’s history as compelling evidence of broad public sentiment on the issue. Currently, a standard tax rate of 20 per cent applies to earnings above £12,570, while higher earners face a 40 per cent rate on amounts exceeding £50,270 – both thresholds have remained frozen since 2021.

At the centre of the dispute is ‘fiscal drag’, a situation arising from the personal income tax allowance being frozen at £12,570 since 2021. During a Westminster Hall debate in the Commons earlier this year, Liberal Democrat Daisy Cooper highlighted the overwhelming public support as a reflection of the nation’s mood, stating: “The number of people who have signed it speaks to the strength of public feeling about this issue, which is a serious policy challenge for all political parties. Indeed, I think the petition does more than show the strength of feeling that exists.

“I regard it as a cry for help, because right around the country there are struggling families gripped by a cost-of-living crisis. We have a toxic combination that means that people are seeing their taxes go up but not seeing services improve. It is leading to that cry for help.” Exchequer Secretary to the Treasury James Murray has cautioned that increasing the tax threshold would place considerable pressure on the public purse. He said: “We were elected to put more money in people’s pockets and, crucially, we were elected to do so in a fiscally responsible way. That is a critical point to understand.”

A leading think-tank has predicted that working-age households will be approximately £500 worse off on average over the coming year owing to frozen income tax thresholds. Those in the most financially vulnerable positions are set to bear the greatest burden – a newly published report by the Resolution Foundation, released ahead of the new tax year, found that the bottom 10 per cent of earners will be at the ‘sharp end’.

The report disclosed that shifts in energy and fuel prices alone could leave lower-income households confronting a rate of inflation almost a percentage point higher than those in the top income ten per cent by the close of this year, according to the Resolution Foundation’s latest findings.

The Resolution Foundation described a “triple hit” as the new tax year got under way in April, with households wrestling with the combined pressure of taxation, soaring utility bills, and substantial council tax increases. It highlighted that families in particular will be around £500 worse off as a direct consequence of the personal tax allowance freeze. In the November Budget, Chancellor Rachel Reeves extended the tax threshold freeze through to 2031. For the 2026/27 tax year, the standard UK Personal Allowance remains frozen at £12,570, meaning no income tax is due on earnings up to this figure. The basic rate of 20 per cent applies up to £50,270, the higher rate of 40 per cent up to £125,140, and the additional rate of 45 per cent on any income exceeding £125,140.

To view and back the petition click here.