Cost of PA increase

Summary

The requester asked for the detailed workings behind a Treasury estimate that increasing the personal allowance to £20,000 would reduce income tax revenue by £63m. The Treasury explained the modelling methodology and provided revenue impact ranges but withheld the specific individual tax records used in the calculation due to data protection laws.

Key Facts

• The Treasury uses a specific tool to model personal allowance changes against individual income tax records from the last complete tax year (2023/24).
• The detailed workings were withheld because they relate to individual client tax records, which are considered personal data under the GDPR.
• Modelling from October 2025 showed a £250 increase in personal allowance would reduce revenue by approximately £2.53 million.
• The Treasury Minister estimated that increasing the allowance to £20,000 would result in a revenue decrease between £52.5 million and £63 million.
• The revenue estimates do not include inflationary growth and are based on 60,282 assessments.

Data Disclosed

• £20,000
• £63m
• 2025-11-06
• 2025-12-03
• 2023/24
• £14,750
• £15,000
• 21%
• £291,178,435.15
• £288,668,924.08
• £2,534,016.14
• 60,282
• £2.5 million
• £3 million
• £52.5 million
• 2025-10-08
• 2025-11-04

Exemptions Cited

• Article 4(1) of the General Data Protection Regulation (GDPR) as applied by the Data Protection (Application of GDPR) Order 2018 (Personal Data)

Original Request

Recently Dr Allinson stated to the House of Keys that an increase of the personal allowance to £20,000 per annum would lead to a £63m reduction in income tax revenue. I would like to see the workings behind this figure.