Review and Reform UK Income Tax Thresholds to Address Fiscal Drag

Summary

We want the Government to review income tax thresholds and automatically index the Personal Allowance and tax bands to inflation to prevent fiscal drag. The Personal Allowance has been frozen at £12,570 since 2021 despite rising inflation. As wages increase to match living costs, more people are pushed into higher tax bands and pay more tax without real income growth. This fiscal drag acts as a hidden tax rise. We call on the Government to index income tax thresholds to inflation and review marginal rate cliffs to ensure fairness and transparency.

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Timeline

1. 30 March 2026

   Petition

   We want the Government to review income tax thresholds and automatically index the Personal Allowance and tax bands to inflation to prevent fiscal drag. The Personal Allowance has been frozen at £12,570 since 2021 despite rising inflation. As wages increase to match living costs, more people are pushed into higher tax bands and pay more tax without real income growth. This fiscal drag acts as a hidden tax rise. We call on the Government to index income tax thresholds to inflation and review marginal rate cliffs to ensure fairness and transparency.

   Source: Petition

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