Burnham pulls back on suggestion to increase tax-free personal allowance

Greater Manchester Mayor Andy Burnham has backtracked on his suggestion to raise the tax-free personal allowance, a move that would have benefited many taxpayers.

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frustration about the personal allowance

The current £12,570 threshold has remained unchanged since 2021. This freeze means that as people's earnings increase, more of them are pulled into the income tax bracket. Burnham had indicated that the "frustration about the personal allowance" he encountered during campaigning for the Makerfield by-election was on his mind.

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all of this will be looked at

However, Burnham has since clarified that any changes to the personal allowance are not part of his immediate plan to address the cost of living crisis. He emphasized the need for "fiscal discipline" and a commitment to existing fiscal rules, acknowledging that difficult decisions must be made. The Institute for Fiscal Studies estimates that unfreezing the allowance could cost the government between £8.5 billion and £9 billion annually.

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difficult given the financial circumstances in which we find ourselves

Government sources have indicated to the BBC that there are currently "no plans" to alter the personal allowance in the short term. Burnham stated that his earlier comments were meant to show awareness of the issue and its impact, and that any potential adjustments would be considered in the upcoming budget, though he cautioned about the difficulty given the nation's financial situation.

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We've got to show fiscal discipline. We've got to show that our commitment to the fiscal rules is real and we're prepared to make difficult decisions in relation to that.