A campaign demanding an increase to the income tax threshold has reached a significant landmark, placing mounting pressure on Chancellor Rachel Reeves to adjust the personal tax allowance for Britain’s lowest-paid employees in the spring statement on March 3.

Alarm is mounting that millions of additional people, including many of the country’s poorest earners, have been ensnared by the tax system through ‘fiscal drag’. This results from the basic income tax threshold being held at £12,570 since 2021, whilst inflation, which affects salaries, has been rising sharply.

Consequently, some of Britain’s most vulnerable workers face taxation the moment their earnings exceed that figure – and because it has remained unchanged, inflation and salary increases mean that millions more are liable for tax than would have been the case had it risen in line with tradition.

A petition on the Parliament website calling on the government to raise this threshold has garnered 76,000 signatures, meaning the Treasury must now provide a response. Should it achieve 100,000 signatures, a Parliamentary debate could be triggered, intensifying pressure on Ms Reeves to implement reforms in the November Budget.

However, supporters must act swiftly to cross the threshold – merely 3 days remain before it closes on February 28. The petition, launched by Shannon Keene, states: “Raise the income tax personal allowance from £12,570 to £20,000. This would help with increasing rent, mortgages, Council tax, and Gas and Electric bills. Some families can’t afford to go back to work after children due to childcare costs wiping out their whole income!”

“We think that we are currently paying ridiculous amounts of tax, and that minimum wage isn’t even enough to support an average family. We believe that this would lead to a massive increase in people willing to look for work, instead of people not wanting to, due to it being too expensive to live now.”

The issue has prompted numerous petitions, highlighting the depth of public feeling across the country. Earlier this year, one petition demanding the threshold be raised to £20,000 amassed an impressive 281,792 signatures on the Parliament website before it closed to further signatories over the summer.

This prompted a Parliamentary debate in which the Treasury estimated the cost at £50 billion. Illustrating the extent of public concern, a new petition has since been launched calling for the income tax personal allowance to be increased from £12,570 to £20,000.

The previous petition’s standing as amongst the largest ever recorded on the parliamentary website was interpreted by activists as evidence of significant public sentiment regarding this issue. At present, a basic tax rate of 20 per cent applies to earnings exceeding £12,570, whilst higher earners face a 40 per cent rate on income beyond £50,270 – both limits have stayed frozen since 2021.

The controversy centres on ‘fiscal drag’, a situation arising from the personal income tax allowance being held at £12,570 since 2021. During a Westminster Hall debate in the Commons earlier this year, Liberal Democrat Daisy Cooper highlighted the considerable public support as reflecting the nation’s mood: “The number of people who have signed it speaks to the strength of public feeling about this issue, which is a serious policy challenge for all political parties. Indeed, I think the petition does more than show the strength of feeling that exists.

“I regard it as a cry for help, because right around the country there are struggling families gripped by a cost-of-living crisis. We have a toxic combination that means that people are seeing their taxes go up but not seeing services improve. It is leading to that cry for help.”

James Murray, Exchequer Secretary to the Treasury, has cautioned that increasing the tax threshold to £20,000 would impose a considerable financial burden. He stated: “I recognise the views of everyone who has put their name to the petition, and let me be clear that, as a Government, we want taxes on working people and on pensioners, who have worked hard all their lives, to be as low as possible.

“We were elected to put more money in people’s pockets and, crucially, we were elected to do so in a fiscally responsible way. That is a critical point to understand.

“We aim to keep taxes on working people and pensioners as low as possible, but if we were to heed the calls of some Opposition parties and abandon fiscal responsibility, it would lead to economic chaos and the collapse of public services, and that would harm working people and pensioners the most.

“Raising the personal allowance to £20,000 would cost more than £50 billion. That is more than the £45 billion of unfunded tax cuts announced by Liz Truss in her disastrous mini-Budget.”

To see and back the petition, click here.