A petition urging the government to raise the income tax personal allowance from £12,570 to £20,000 has garnered 75,000 signatures and requires 100,000 to prompt a debate in the House of Commons. With just five days remaining until the deadline on Saturday, February 28, the campaign gains momentum on the Parliamentary website.
Key Reasons Behind the Petition
The initiative highlights soaring costs for rent, mortgages, council tax, gas, and electricity bills. It argues that high childcare expenses prevent many families from returning to work, as these costs often consume entire incomes. Supporters contend that current tax levels are excessive, and minimum wage fails to sustain an average family.
The petition asserts that elevating the allowance would encourage more individuals to seek employment rather than face financial disincentives to working.
Understanding the Current Tax System
Income tax liability each tax year depends on earnings above the personal allowance and within specific tax bands. The ongoing tax year spans from April 6, 2025, to April 5, 2026.
The standard personal allowance stands at £12,570, representing tax-free income. This amount decreases by £1 for every £2 of adjusted net income exceeding £100,000, reaching zero at £125,140 or higher.
Additional tax-free allowances apply to savings interest and dividends for share owners. Self-employed individuals enjoy a £1,000 trading allowance on initial income, while property rental income up to £1,000 qualifies similarly, excluding Rent a Room Scheme users.
Impact on Households
Officials note these thresholds aim to balance revenue needs with taxpayer relief amid rising living costs.
