We are calling on Rachel Reeves to reverse the extended freeze on PAYE Tax Bands! LET US KEEP THE MONEY WE EARN!

In 2024's budget, Rachel Reeves promised not to extend the freeze on our PAYE tax bands. She outright said "it would be an attack on working people"! And what does she go ahead and do this year? She attacked us, by extending the ban to beyond the next election, into 2031! 

The audacity of Rachel Reeves to say she is "asking ordinary people to pay a little bit more" threw me. First of all, it's not a question, she's not asking, it's a demand. Secondly, why is this necessary? The Chancellor has created £22bn of headroom in her budget, thats just excess income, but the tax freeze is only expected to make £8.5bn in the year first year, more in each following year. So, even without the freeze on PAYE tax bands, she'd still have almost £14bn in headroom, which is more than enough! 

Further problems

By 2031, 25% of all employees in the UK will be paying higher rate tax. 

By 2027, State Pension will be higher than the £12,570 tax-free allowance, meaning pensioners will need to start paying tax on their state pension as early as 2030 (Rachel Reeves has said the government will make an exception for taxing state pensions for this parliament, but no promises for anything further out). 

The higher rate bands are designed to tax excess income for HIGH earning jobs in the UK, not average people. It's meant to get extra tax income from CEOs, Directors, Bankers, Senior Managers of large organisations, people that have a much higher relative income. It's not meant to punish average people even more for an inflationary spiral that has already decimated our disposable incomes.

The freeze on PAYE bands was originally meant to end in 2026, but was extended by the previous conservative government to 2028. When Labour came in they said they'd make things better, put more money in our pockets. Now, it's been extended to 2031?! It's outrageous. '

UNFREEZE OUR TAX BANDS!

How will this help people?

What we are specifically asking for is PAYE tax bands to become unfrozen and to rise in line with inflation from April 2028, again.

Let's assume that inflation ends up around 3% (it is currently higher than this, but I'm being conservative with the estimated benefits), then we'll see our tax free allowance move:

• from £12,570 up to £12,947 in 2028,
• then up to £13,336 in 2029,
• then up to £13,736 by April 2030. 

This isn't a huge amount, but it would be an extra £233 of take home pay per person (20% of the c.£1,150 increase in tax-free allowance). 

Now look at the benefits to those on the higher rate tax bands. Firstly, we'd see some people fall out of the higher-rate band, which would be excellent as there are a lot of people who shouldn't be paying higher-rate tax but currently are!

But lets look at the numbers. If the higher-rate band also moved in line with inflation over the next few years then we'll see it move:

• from £50,270 to £51,778 in 2028,
• then up to £53,331 in 2029,
• then up to £54,931 by April 2030.

This is a much bigger benefit to those middle earners who shouldn't really be getting charged higher-rate tax. Moving the higher-rate tax band up by over £4,600 would save each of these people over £1,150 per year on tax by April 2030, including the £233 benefit of moving the tax-free allowance band up as well. 

If the government unfreeze the tax bands in 2028 then the UK's middle-earners could be over £100-per-month better off by April 2030, without even having to earn a pay rise. This is more disposable income to help improve economic growth, or at the very least it'll mean less debt on things like our energy bills and council taxes.

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