A petition is calling to raise the personal tax allowance to £18,000
The Government has issued a statement after a petition has received more than 17,000 signatures(Image: clubfoto via Getty Images)
The Government has issued a statement responding to calls to increase the personal tax allowance, which has remained the same since 2021.
Personal tax allowance is the maximum amount of money you can earn, without having to pay tax. Currently, the standard personal tax allowance is £15,570 – meaning anyone earning this amount or less do not have to pay any tax.
Employees who earn between £12,571 to £50,270 pay tax at a rate of 20% on their earnings above the standard personal allowance threshold. Then those earning between £50,271 to £125,140 will pay 40% tax on anything they earn above £50,271.
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Now, the Government has issued a statement relating to Personal Allowance, after a petition calling for change has received more than 17,000 signatures.
The petition is titled ‘Raise the personal tax allowance to £18,000’, with a description which reads: “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.”
After receiving 10,000 signatures, the Government is mandated to issue a written statement. Once a petition received 100,000 signatures or more, the topic must be considered for debate in Parliament.
In a response issued on Tuesday, May 5, the HMRC confirmed that the Government has no current plans to increase the personal allowance.
“The Government currently has no plans to increase the Personal Allowance to £18,000,” the response reads. “Increasing the Personal Allowance to £18,000 would come at a significant fiscal cost of over £40 billion per year.
“The Government is committed to keeping taxes for working people as low as possible while investing in public services and not taking risks with the economy. The previous government froze the main income tax thresholds from 2021/22 until 2027/28 – this means the Personal Tax allowance was not due to rise until April 2028 at the earliest.”
The response continues to explain that at the budget in 2025, the government announced that the personal tax thresholds are to be maintained at their current level for a further three years, which will mean they stay the same until 2030.
The full statement reads: “The Government currently has no plans to increase the Personal Allowance to £18,000. Increasing the Personal Allowance to £18,000 would come at a significant fiscal cost of over £40 billion per year. This would also benefit higher earners more than basic-rate taxpayers on average.
“Raising the Personal Allowance to £18,000 would reduce tax receipts substantially, decreasing funds available for the UK’s hospitals, schools, and other essential public services that we all rely on. A £40 billion cut in public services is equivalent to slashing roughly a fifth of the NHS Budget in England, or around two thirds of defence spending.
“The income tax system is highly progressive, with different rates of tax sitting above an internationally high Personal Allowance. The Government is making these fair and necessary choices on tax so it can deliver on the public’s priorities. Alongside this, the Government is keeping the contribution as low as possible by pursuing a programme of reform to fix longstanding issues in the tax system.
“To support the lowest paid workers in our economy, the Government has asked the Low Pay Commission to account for the cost of living when making each of their recommendations on the minimum wage rates that have applied since April 2025.
“The government is also supporting families through the universal offer of 15 hours of government-funded childcare for all parents of 3- and 4-year-olds and eligible working parents of children aged 9 months and above can access 30 hours a week in free childcare.”
The petition can be found here.
