Raise the standard Personal TAX Allowance from £12,570 to £20,000

Currently, the standard Personal TAX Allowance is £12,570, which is the amount of income you do not have to pay tax on. With the cost of living crisis, historic high inflation & rising interest rates, everyone is struggling & the threshold needs to be raised to above £20,000 to help families survive

With the fuel crisis, cost of living crisis, historic high inflation and rising interest rates everyone is struggling to make ends meet and it is only going to get worse before it gets better. Lots of people will default on mortgages as interest rates are raised and there is a clear need for the tax system to keep up with the changing times. The standard Personal Allowance of £12,570, needs to be reviewed & raised to over £20,000 to alleviate the severe pain that the common people are enduring.

The Government made the difficult but necessary decision to maintain income tax thresholds, including the Personal Allowance (PA), until April 2028 to ensure the tax system supports strong public finances.

Maintaining these thresholds is universal, progressive and fair. The highest earners will contribute more of the revenue.

The Government has increased the PA by over 40 per cent in real terms since 2010, ensuring some of the lowest earners do not pay income tax. Thanks to the PA, in 2021-22 around 30 per cent of earners did not pay tax. If the PA had been uprated by inflation every year since 2010-11, it would be £8,765 in 2022-23, which is £3,805 lower than its current level of £12,570.

The PA is high by international standards – it is one of the most generous personal tax allowances in the OECD and highest in the G7.

The Government is committed to supporting hard-working families and is keeping the historic increase in the National Insurance starting thresholds introduced in July 2022 to ensure that individuals can earn £12,570 tax free.

The Government is committed to ensuring individuals keep more of what they earn and making the UK a more attractive place to live and work, whilst ensuring the UK’s economic stability. This includes having an income tax system that is already highly progressive; the top 5 per cent of income tax payers are projected to pay half of all income tax, and the top 1 per cent are projected to pay over 28 per cent of all income tax in 2022-23.

The Government understands that people are worried about the cost of living challenges ahead. That is why decisive action has been taken to support households across the UK through cost of living challenges ahead, whilst remaining fiscally responsible.