A petition calling for a significant increase in the UK personal tax allowance is close to being debated in Parliament, with just two days left to reach the required threshold. The petition, set up by Mike Haynes earlier this year, closes on Wednesday, September 30, 2026.
The petition asks the Government to raise the amount people can earn before paying tax to £18,000. The allowance is currently set at £12,570, a level it has held since 2021, and is planned to remain so until April 2031.
Supporters argue the freeze is causing fiscal drag, as wages rise but the allowance does not. This pulls more people into paying tax to HMRC over time, with more facing being dragged into higher tax brackets as the allowance fails to move in line with wage increases.
Petition background
When he set up the petition, Mr Haynes said: "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."
As the petition is on the Parliament petitions website, certain milestones trigger responses from the Government. It passed 10,000 signatures back in April, which meant the Government had to respond. If it passes 100,000 by Wednesday, it will be considered for debate in Parliament. At the time of writing on Monday morning it was nearing 84,000 signatures.
Campaigner's comments
Speaking last week, Mr Haynes said: "I set it up because people are looking at a pay freeze of 10 years while MPs lap it up. So, if lifted in 2031, our buying powers have been reduced by 35% and that's just down to inflation - forget about price increases, which probably means we're closer to 50%. How much money has the Chancellor received due to extortionate petrol and diesel prices?
"Then there's VAT added to fuel duty - it's so wrong. I thought VAT wasn't applied to the necessities of life, but it is. How come it's added to gas and electricity bills? Had thresholds not been frozen, they would now be in the region of £16,400."
This week's petition deadline comes as Chancellor John Healey prepares to deliver his first Budget on October 28. Whether his perspective on the personal allowance issue differs from that of his predecessor Rachel Reeves remains to be seen.
Mr Haynes' petition is not the only one to call for a raise, and some prominent figures have argued for it to be changed as well. Last week, Ecotricity owner Dale Vince argued that raising the personal allowance by £3,000 could generate a 1.2% boost to GDP. Mr Vince argued the measure could be financed by the Bank of England ceasing interest payments to commercial banks on their reserves.
Government response
Responding in May, after Mr Haynes' petition passed 10,000 signatures and before Andy Burnham became Prime Minister and Mr Healey Chancellor, HM Treasury said: "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.
"To ensure that the Government can deliver on the public’s priorities, at Budget 2025 it was announced that the personal tax thresholds, including the Personal Allowance, would be maintained at their current levels for a further three years to the end of this decade. 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.
"At Budget 2025, the Government also announced a package of measures that will bear down on prices and help ease cost of living pressures for working people, targeting everyday expenses. This includes cutting energy bills and freezing rail fares and NHS prescription fees. The Government keeps all taxes under review as part of the policy making process."
