HM Treasury has responded to calls to raise the tax-free Personal Allowance up to £18,000 to help working people amid the latest cost of living crisis.

A new petition launched by an Express reader is urgently calling on the government to end its ‘unfair’ tax-free Personal Allowance freeze which is pushing more workers into paying more tax.

Mike Haynes, 64, from Devon, has launched a petition to get the tax-free Personal Allowance increased to account for inflation, following Labour’s decision to extend the existing freeze all the way to 2031.

He urged the Treasury to help working people afford petrol following the Iran crisis which has seen the price of fuel soar while calling out Sir Ker Starmer for not doing enough.

Mr Haynes, who works as a warehouse forklift instructor, told the Express that the freeze is ‘unfair’ and hurts working people.

The Axminster man said: “MPs have given themselves a 5% pay rise, they aren’t feeling it like we are. Fuel prices have shot up and they’re driving around in chauffeur-driven limousines.

“If the minimum wage is £12.71 [an hour], multiply that by 40 [hours] that takes you up to £26,000 a year, when you’re spending £7 on a gallon of petrol and things like that, that’s going to chip into that, I think the exemption should be £18,000.”

The tax-free Personal Allowance is the amount of money an individual is allowed to earn in a single tax year before they have to pay Income Tax to HMRC.

Workers can earn £12,570 tax-free, then must pay 20% tax on all earnings above that figure, and 40% on earnings above £50,270, and finally, 45% on earnings over £125,140.

The allowance has been frozen since 2021, and Chancellor Rachel Reeves confirmed in the Budget that it will continue to be frozen until 2031 at the earliest, which means it will have been stuck at the same level for 10 years.

The threshold level of £12,500 in 2019 is worth approximately £16,215 in 2026 accounting for inflation.

Following Chancellor Rachel Reeves’ decision to continue the freeze until 2031, Mr Haynes has launched the parliamentary petition urging the government to reconsider.

He wrote in the petition: “Since 2021 personal tax allowance has been frozen at £12,570. This freeze was due to expire this year but the Chancellor of the Exchequer has extended it to 2031.

“We want to keep some more of our own money.

“If you are earning minimum wage then you may soon be paying tax because of fiscal drag. Some higher earners pay little or no tax due to clever use of accounting rules. We think this is so wrong.”

Mr Haynes said he blames Prime Minister Sir Keir Starmer, as well as his predecessors, and called on Starmer to do more to help people, such as cutting fuel duty and slashing VAT off energy bills.

He added: “Other countries have reduced fuel duty, it makes me laugh when Starmer says he’s doing everything he can. He’s doing nothing.

“Steamroller Starmer I call him. He’s not a leader is he. If I was him I’d take VAT off energy bills for 18 months, I’d say we’re reducing fuel duty by 15p a litre. People can’t afford to get to work.

“I think the system needs streamlining, get rid of National Insurance and Income Tax and merge it all into one like they did with Universal Credit, it’s costing too much to run HMRC.”

In response, essentially ruling out the suggested increase, an HM Treasury spokesperson said: “In the Budget we increased the National Living Wage and National Minimum Wage and took £150 off people’s energy bills, extended the freeze on prescription fees, fuel duty and froze rail fares for the first time in 30 years.

“The fair and necessary decisions we made at the Budget mean we can deliver on the country’s priorities – cut waiting lists, cut debt and borrowing and cut the cost of living.”

To sign the petition, click here.