Update in ‘raise tax thresholds for more disposable income’ plan | Personal Finance | Finance
A campaign to lift more people out of tax has taken a step forward after a new petition was launched. More than 5,200 people have backed the fresh online petition demanding the personal tax allowance be lifted from £12,570 to £15,597. The goal is to “give more people money in their pockets to pay their bills” and cut dependency on government support.
The petition’s founder, Andy Hobson, is also urging the UK Government to boost the higher income tax threshold from £50,271 to £62,379.02. Earlier this year, the Labour Government confirmed that the Personal Allowance will stay frozen at £12,570 until April 2028.
The suggested income tax thresholds by the campaigner are founded on the existing thresholds, which have remained unchanged since 2021. Mr Hobson contends that “as we pay more for goods, our tax free allowance stays the same meaning we’re getting poorer”.
Latest figures from the Office for National Statistics (ONS) show that the rate of inflation has now climbed to 3.8 per cent. The ONS credits the inflation rise to increased transport costs, notably airfares as families departed on holiday, and a spike in food prices.
Food inflation leapt to 4.9 per cent in July from 4.5 per cent in June as supermarkets wrestled with global supply chain disruptions and economic uncertainty closer to home. Core inflation, which strips out more volatile items such as food, alcohol and tobacco, also increased in the 12 months to July to 3.8 per cent from 3.7 per cent in June, reports the Daily Record.
The ‘set the income tax personal allowance to £15,597 and higher rate to £62,379.02’ petition has been published on the Petitions Parliament website. With 10,000 signatures, it would qualify for a written response from the UK Government and at 100,000, it would be considered by the Petitions Committee for debate in Parliament.
The petition states: “Set the tax free allowance at £15,597, calculated via the Bank of England inflation calculator Vs 2021 when the current rate was set. The same for the higher rate, currently £50,271 set in 2021, this should be £62,379.02.
“We think this would give more people money in their pockets to pay their bills and rely less on government help. This could also mean more money being spent so more VAT in the government’s pocket too.
“We are currently suffering fiscal drag because of this and the previous government chose to freeze thresholds but we think this is a stealth tax. As we pay more for goods, our tax free allowance stays the same meaning we’re getting poorer.”
