A petition to raise the HMRC income tax personal allowance threshold from £12,570 to £20,000 has not been upheld, despite being signed by more than 250,000 people, and being debated by MPs.
In a debate in Westminster Hall tonight, MPs put forward passionate debates for and against the proposal, which was started by pensioner Alan David Frost, saying: "Raise the income tax personal allowance from £12570 to £20000. We think this would help low earners to get off benefits and allow pensioners a decent income.
"We think it is abhorrent to tax pensioners on their State Pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth."
Signatures can still be added here.
Lewis Atkinson is the Labour MP for Sunderland Central, introduced the petition, saying: "The reality is that average disposable incomes after tax fell from 2019-20 to 2023-24 an unprecedented and shocking situation in which people were left poorer at the end of the last Parliament than they were at the start of it.
"That, I believe, is key context for today's debate, which has been triggered as a result of more than 250,000 citizens signing this petition about income tax personal allowances, for which I think also speaks to the wider and entirely understandable public frustration about living standard."
He added: "In preparation for today's debate, I had the pleasure to talk with Mr. Alan Frost, who is in the gallery with us today, the creator of this petition.
"Mr. Frost explained to me that he's recently retired, having worked his whole life, and he feels a sense of injustice that his state pension is considered as income for tax purposes, and that the tax threshold he faces are not increasing."
MPs then debated the issue for almost an hour, including Liberal Democrat MP Tom Morrison , who said "I believe that increasing the personal increase allowance could ease the burden that many are facing."
Fellow Liberal Democrat MP Daisy Cooper MP added that the number of people who signed this petition as a "cry for help".
Conservative MP James Wild gave a: "spoiler alert (as) I think they are going to be disappointed because we have all seen the government's response where it says there are no such plans."
The debate was concluded by James Murray, Exchequer Secretary to the Treasury, who explained that due to fiscal responsibility, it is not possible to change the personal allowance in the current climate.
He estimated it would cost £50bn to make the change, saying: "I recognize the substantial support for this petition, hard working people and pensioners who have worked hard all their lives want taxes to be as low as possible, and I understand that.
"However, as we have set out today, we have inherited a mess from the previous government, and we have had to take tough choices to set us on a path to generating economic growth.
"Raising the personal allowance to £20,000 would undermine the work the chancellor has done to restore fiscal responsibility and economic stability, and it would slash the funding available for vital public services. This government remains committed to keeping people's taxes as low as possible."
What is the Personal Tax Allowance?
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.
It decreases if your income is over £100,000. For every £2 you earn over £100,000, you lose £1 of your tax-free Personal Allowance.
This amount has been frozen since 2021.
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The former Conservative Government froze the threshold until April 2028, rather than allowing it to rise with inflation and wage growth, meaning more people will go onto higher tax brackets.
If you’re married or in a civil partnership, you may be able to claim Marriage Allowance to reduce your partner’s tax if your income is less than the standard Personal Allowance.
If you do not claim Marriage Allowance and you or your partner were born before 6 April 1935, you may be able to claim Married Couple’s Allowance.
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