Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

 

The Government refuses to increase the annual Personal Allowance to £20,000


Newsletter issue – July 2025

Parliament debated a petition calling for the income tax threshold to be raised from £12,570 to £20,000 to allow people to keep more of their earnings. The petition, signed by over 250,000 people, was spearheaded by pensioner Alan Frost, who described it as a "cry for help."

MPs acknowledged concerns over increasing tax burdens on low earners and pensioners but stated that raising the threshold would cost between £40 billion to £90 billion annually. Labour's James Murray, Exchequer Secretary to the Treasury, rejected the proposal, citing concerns that it could jeopardize funding for defence and the NHS.

The ongoing income tax threshold freeze, first introduced in 2021, has led to more workers falling into higher tax brackets due to "fiscal drag. The Institute for Fiscal Studies (IFS) estimates that, by 2025-26, an additional 1.3 million people will enter the tax system, with 1 million pushed into the 40% higher-rate band.

Despite growing support, the Treasury has firmly rejected the petition, arguing that raising the threshold would significantly reduce tax revenue needed for public services. Given the recent U-turn on the winter fuel allowance, it remains to be seen if the Government will change its mind on the Personal Allowance threshold.

 

 

Request a callback from Mapperson Price

Our philosophy is to provide a professional friendly service to local people, including employed, self-employed and small to medium sized businesses. Fill in our callback form and we'll contact at a suitable time for you.

The partners are supported by staff with a range of experience in accounts, taxation, payroll, and company secretarial work to support the various services the firm offers.

REQUEST CALLBACK

We always aim to get it right first time, every time, we'll respond to you as soon as possible after your form has been received by us.

 


Newsletter Icon

Newsletter Sign up

Handy tax tips delivered directly to your email inbox