A major petition calling on the government to change the controversial personal tax allowance thresholds has soared to more than 30,000 signatures. Organisers want Chancellor Rachel Reeves to raise the amount people can earn before paying tax from £12,570 to of £45,000.

Since the fiscal year 2021/22, a number of tax allowances in the UK have been “frozen”, meaning they have no longer been increased in line with the cost of living. Freezing tax thresholds increases people’s taxable income without tax rates actually increasing. This results in additional revenue to the government. This phenomenon is called ‘fiscal drag’, as more taxpayers are ‘dragged’ into paying tax, or into paying tax at a higher rate.

The petition’s creator, Denver Johnson said: “We think that the Personal Allowance, as termed by the government, has been kept unreasonably low for far too long, at the expense of the poorest, most needy people in our society.

“We feel that the poorer majority should pay substantially less than the wealthy. We think that the tax system seems designed to make the divide between rich and poor increase exponentially.” To view the petition click here.

In last year’s budget Rachel Reeves decided not to extend the personal tax allowance threshold freeze beyond 2028. The petition has now reached more than 30,000 signatures – doubling in days – meaning that a Department for Work and Pensions response should be made.

Government responds to all petitions that get more than 10,000 signatures and the petition is currently awaiting a reply. At 100,000 signatures, the petition will be considered for debate in Parliament.

Successive governments have frozen the personal tax allowance rates meaning people are sucked in to paying more tax. The Office for Budget Responsibility has published figures estimating freezes to the income tax personal allowance and higher-rate threshold for four years “will bring 1.3 million people into the tax system and create one million higher-rate taxpayers by 2025/26”.

MoneySavingExpert.com founder Martin Lewis has said: “Imagine someone who currently earns £12,000 now. Because earnings do tend to increase each year, in a couple of years’ time they’ll earn £13,000. But because the thresholds are frozen, they will now start to pay 20% tax on some of their earnings.

“And in fact, what freezing the threshold does is that it means no matter what you earn, as your earnings increase, a bigger proportion of your earnings goes on tax. And that’s how the Chancellor makes money from it.”

In the Rachel Reeves budget earlier this year the chancellor confirmed National Insurance thresholds across the UK and Income Tax thresholds in England, Wales and Northern Ireland would remain frozen until April 2028 – which is in line with what the previous Conservative Government said last year. There had been speculation that the new Labour Government would extend this ‘freeze’ further to 2030.

Victor Bulmer-Thomas, writing previously on a blog on the London School of Economics warned: “The distributional impact of this particular stealth tax may come back to bite the administration that imposed it. The reason is that the impact is much more severe on those on lower incomes than those on higher ones.

“At the end of the fiscal year 2021/22, the median pay of a full-time worker in the UK was £33,374 similar to the example of the individual I used above. The median pay of the bottom decile of full-time workers (the lowest ten per cent) was £20,691. Using all the same assumptions as above with regard to inflation, wage increases and applying the frozen Personal Tax Allowance, a “typical” individual in the lowest decile would see their tax bill increase from £1,624 to £2,906.

“This is a jump in the average tax rate from 7.8 per cent to 10.7 per cent, which is an increase of 37.7 per cent. Furthermore, the basic rate of tax needed to secure the same amount of tax from this individual would have to be 27.7 per cent – a massive increase on the “official” rate of 20 per cent. No government would survive for long if it transparently imposed tax increases of this magnitude on the poorest in society.”