A major call for reform is gaining momentum across the UK as citizens urge HMRC to raise the Personal Tax-Free Allowance from the current £12,570 to £15,597.
A growing Parliamentary petition suggests that the current tax thresholds, frozen since 2021, no longer reflect inflation-adjusted reality—placing undue financial pressure on working individuals and families.
Why the Change Is Being Demanded
The petition, launched by Andy Hobson and running until 28 January 2026, is based on Bank of England inflation calculations.
The key argument is that if tax thresholds had risen with inflation since 2021, the Personal Allowance should now stand at £15,597, and the higher-rate threshold should rise from £50,271 to £62,379.02.
The campaign suggests the current freeze is contributing to “fiscal drag”—a stealth tax where more people are pulled into higher tax brackets as wages rise due to inflation, but thresholds remain the same.
This effect diminishes take-home pay and increases dependency on government assistance.
Current Tax-Free Allowance Explained
The Personal Allowance refers to the portion of your income on which you do not have to pay income tax. As of now, this figure is:
| Income Bracket | Threshold (Current) | Proposed New Threshold |
|---|---|---|
| Personal Allowance | £12,570 | £15,597 |
| Higher Rate Starts | £50,271 | £62,379.02 |
| Allowance Tapers Off | £100,000+ | No change proposed |
| Personal Allowance Ends | £125,140+ | No change proposed |
For those earning over £100,000, the Personal Allowance is reduced by £1 for every £2 of income over this amount. By the time earnings hit £125,140, the allowance is entirely removed.
What the Petition Aims to Achieve
The petition outlines several intended benefits:
- More money in people’s pockets to pay for essentials like food, fuel, and housing.
- Reduced reliance on government support and welfare schemes.
- Increased consumer spending, potentially boosting VAT revenues for the government.
- A counter to the stealth tax effect caused by threshold freezes.
At 10,000 signatures, the government is obligated to respond. At 100,000 signatures, the petition must be considered for Parliamentary debate, offering a real opportunity for policy change.
Potential Economic Impact
Raising the Personal Allowance could relieve pressure on millions of households, especially amid cost-of-living challenges.
However, it may also reduce short-term tax revenue unless offset by growth in consumer spending or new revenue measures.
Many experts argue that while the current freeze was designed to stabilize the economy post-pandemic, it’s now pushing middle-income earners into higher brackets without corresponding real wage increases.
The tax burden has become heavier for everyday earners—not because they earn more, but because inflation distorts the thresholds.
The campaign to raise the Personal Tax-Free Allowance to £15,597 highlights the growing frustration with the current tax system’s failure to reflect economic reality.
With the petition still open and gaining support, all eyes will be on HMRC and the Labour government for a response.
If the issue enters Parliamentary debate, it could spark one of the most significant income tax reforms in recent years.
FAQs
What is the Personal Tax-Free Allowance currently?
The standard Personal Allowance in the UK is £12,570, meaning you don’t pay tax on this amount of your income.
Why is there a call to raise it to £15,597?
Because inflation has eroded the value of money since 2021, many argue the allowance should be adjusted accordingly using Bank of England data.
Will the higher-rate threshold also change?
The petition proposes raising it from £50,271 to £62,379.02 to reflect inflation and prevent stealth tax increases.