HMRC Responds to Growing Petition for £18,000 Personal Tax-Free Allowance
HMRC £18,000 personal tax-free allowance update as petition swells in support
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A petition advocating for an increase in the personal tax-free allowance to £18,000 has gained over 31,000 signatures, prompting a response from HM Treasury. The government maintains the allowance will remain at £12,570 until at least 2031, citing fiscal costs and the impact on public services as reasons against the increase.
- 01The personal tax allowance has been frozen at £12,570 since 2021, with the freeze extended to 2031.
- 02HM Treasury stated that raising the personal allowance to £18,000 would cost over £40 billion annually.
- 03The government argues that increasing the allowance would disproportionately benefit higher earners rather than basic-rate taxpayers.
- 04The current income tax system is described as progressive, with high personal allowance rates compared to international standards.
- 05The government is pursuing reforms to address long-standing tax system issues while supporting low-paid workers through various measures.
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A petition calling for an increase in the personal tax-free allowance to £18,000 has garnered over 31,000 signatures, prompting a response from HM Treasury. The current allowance has been frozen at £12,570 since 2021, with the freeze now extended to 2031. The government stated that increasing the allowance would incur a fiscal cost of over £40 billion annually, which could significantly reduce funding for essential public services such as the NHS and education. HM Treasury emphasized that the existing income tax system is progressive, with a high personal allowance compared to other countries. They also noted that raising the allowance would primarily benefit higher earners, contradicting the petition's aim to alleviate tax burdens on lower-income individuals. In addition to maintaining tax thresholds, the government is implementing measures to support low-paid workers, including adjustments to the minimum wage and childcare provisions. Budget announcements also included efforts to lower everyday expenses for working families, such as energy bills and transport costs.
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The proposed increase in the personal tax allowance could significantly affect public service funding and tax burdens for lower-income individuals.
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