Labour Could Be Compelled to Discuss £20,000 Personal Tax-Free Allowance Increase
A petition calling for a significant hike in the Personal Tax-Free Allowance to £20,000 is gaining momentum, with just five days remaining to reach a critical signature threshold that could force a parliamentary debate. The petition, hosted on the official Parliamentary website, has amassed 75,000 signatures but requires 100,000 by the deadline of Saturday, February 28, 2026, to spark a Commons discussion under Labour Party governance.
Petition Details and Rationale
The petition explicitly urges the Labour government to "Raise the income tax personal allowance from £12,570 to £20,000". Supporters argue that this adjustment is essential to alleviate mounting financial pressures on households across the UK. They cite escalating costs such as rent, mortgages, council tax, and utility bills as primary drivers for the proposed change.
Additionally, the petition highlights that some families find it economically unfeasible to return to work after having children, as childcare expenses can consume their entire income. The text emphasizes a widespread sentiment that current tax levels are excessive, and minimum wage earnings are insufficient to support an average family's needs.
Proponents believe that increasing the allowance would incentivize more people to seek employment, countering the trend of individuals opting out of the workforce due to the high cost of living. This could potentially boost labor participation and economic activity.
Current Tax Framework and Allowances
Understanding the context is crucial: the amount of Income Tax paid annually depends on income exceeding the Personal Allowance and the applicable tax bands. For the current tax year, running from April 6, 2025, to April 5, 2026, the standard Personal Allowance stands at £12,570. This is the portion of income exempt from taxation.
However, this allowance is reduced by £1 for every £2 of adjusted net income above £100,000, completely phasing out at £125,140 or higher. Beyond the basic allowance, individuals may benefit from additional tax-free allowances, including:
- Savings interest and dividend income from company shares.
- Up to £1,000 from self-employment, known as the 'trading allowance'.
- Up to £1,000 from rental property income, excluding the Rent a Room Scheme.
The petition's push for a £20,000 allowance represents a substantial increase aimed at providing greater financial relief and stimulating workforce engagement. With the deadline looming, supporters are rallying to gather the remaining 25,000 signatures needed to bring this issue to the forefront of political discourse.
