A plan has been put forward to increase the HMRC personal tax-free allowance for low and middle earners. A Parliament petition urges: "Increase the personal tax allowance threshold to £20,000."
Petition Details
The petition, created by Wade Reid, closes on 14 November 2026, giving it ample time to elicit a response from the Labour Party government. It states: "The personal allowance has been frozen while living costs have risen, meaning workers pay more tax in real terms. Increasing it to £20,000 would put more money into millions of workers’ pockets, helping with rising bills and supporting low and middle earners."
Current Tax Situation
The personal allowance has been frozen since 2021 while living costs have risen sharply, meaning workers are paying more tax in real terms. As wages increase slightly to keep up with inflation, more people are pulled into paying tax or higher rates. Increasing the threshold to £20,000 would put more money into millions of workers’ pockets, ease financial pressure, and support low and middle earners during a cost of living crisis.
Next Steps
If this petition gets 10,000 signatures, the government will respond to it. If it reaches 100,000 signatures, it will be considered for debate in Parliament. The petition remains open until 14 November 2026. In England, Wales and Northern Ireland, the current tax thresholds are frozen until 2031.
Tax Bands for 2026/27
For the 2026/27 tax year, if you live in England, Wales or Northern Ireland, there are three marginal income tax bands: the 20% basic rate, the 40% higher rate and the 45% additional rate. Marginal bands mean you only pay the specified tax rate on that portion of salary. For example, if your salary puts you in the 40% tax bracket, you only pay 40% tax on the segment of earnings in that income tax band. For the lower part of your earnings, you will still pay the appropriate 20% or 0%.
