𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Support is surging for a fresh call urging Chancellor Rachel Reeves to increase the lowest income tax threshold to £18,000. A new petition on the parliament website has seen backing skyrocket since its creation — and it’s 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 thresholds 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 are facing 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.

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.”

It has soared to more than 7,000 signups – and if it gets to 10,000 it will prompt a response from the Treasury, laying out its policy and if changes could happen. If it gets to 100,000 it will be considered for a parliamentary debate.

The impact of the tax thresholds freezes has been analysed by the Office for Budget Responsibility (OBR), and the latest estimate is 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 extension of the freeze, a full-time worker on the minimum wage would pay an extra £137 a year by 2030.

Forecasts indicate that by 2027, the new state pension will surpass this amount due to the triple lock mechanism, placing pensioners at risk of facing higher tax bills. The matter has sparked numerous petitions, demonstrating the strength of public concern nationwide. Earlier this year, one campaign demanding the threshold be raised to £20,000 gathered an impressive 281,792 signatures on the Parliament platform before being closed to additional support during the summer.

This triggered a Westminster debate in which the Treasury put the financial cost at £50 billion. Underlining the scale of public unease, a fresh petition has since been launched urging the income tax personal allowance to rise from £12,570 to £20,000.

Campaigners viewed the earlier petition’s position among the most signed in the parliamentary website’s history as powerful proof of widespread public opinion on this matter. Currently, a standard tax rate of 20 per cent applies to earnings above £12,570, while higher earners are subject to a 40 per cent rate on sums exceeding £50,270 – both thresholds have remained frozen since 2021.

At the heart of the row is ‘fiscal drag’, a situation brought about by 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 pointed to the overwhelming public backing as a reflection of the nation’s mood: “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 warned that raising the tax threshold would place a significant financial strain on public finances. “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 prominent think-tank has forecast that working-age households will be roughly £500 worse off on average over the next year due to frozen income tax thresholds. Those in the most financially precarious positions are set to shoulder the heaviest load — a newly released report by the Resolution Foundation, published ahead of the new tax year, found that the bottom 10 per cent of earners will be at the ‘sharp end’.

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

The Resolution Foundation described a “triple hit” as the new tax year kicked off in April, with households grappling with the combined strain of taxation, soaring utility bills, and significant council tax hikes. It highlighted that families in particular will be around £500 worse off as a direct result 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% applies up to £50,270, the higher rate of 40% up to £125,140, and the additional rate of 45% on any income exceeding £125,140.

To view and back the petition click here.