Prime Minister Andy Burnham has confirmed that he does not plan to raise the tax-free allowance, following reports that he was considering increasing it to help tackle the cost of living crisis.
The personal tax allowance is the amount of money you can earn before you start paying tax, currently set at £12,570 a year for most people. Raising this allowance would allow people to earn more before they pay tax, meaning they would take home more money each month.
Burnham's earlier openness to change
Mr Burnham had suggested earlier this week he was open to increasing the income tax allowance as a means of easing cost-of-living pressures, after claiming “frustration” about it had come up while knocking doors during the Makerfield by-election.
He told The Times: “So when people, they’re just characterising me as a tax raiser, well again it’s never that simplistic is it? The breathing space point is a really serious one. How do we just make people feel better?”
He added that he plans to "stick by" Labour's 2024 general election manifesto when it comes to taxes, but suggested there is “some room” for “movement on tax”. The Labour manifesto said it would not increase taxes on "working people", including National Insurance, income tax and VAT.
No immediate commitment
However, it was announced this morning that the former Greater Manchester Mayor has said there is no immediate commitment to increase the income tax personal allowance. The Prime Minister suggested increasing the £12,570 tax-free personal allowance would be something that the Government will look at in the budget this year.
Asked by broadcasters during a visit to Bath today (July 22) whether he was planning to change the income tax allowance, he said: “Well, it’s funny these days you can’t answer a question honestly without then people reading everything else into it.”
He added: “I want to answer questions honestly in this job, as I said before. I think that’s all about trust in politics and doing politics differently, and I’m determined to keep working in that way.
“It was raised a lot, but I then went on to say, ‘But we’ll have to look at it at the budget alongside everything else’. So no commitment, no unfunded promise.
“It’s just perhaps the way politics is these days and the way people report things, but that was an honest answer. There is no commitment at this point to change, but we will look at that at the budget.”
