Overview
- More than 28,000 people have signed the parliamentary petition, with 100,000 needed for consideration for debate.
- Raising the threshold to £20,000 would cut a basic-rate taxpayer’s bill by about £1,486 a year, or £2,972 for a two-earner household on similar wages.
- Current income tax bands start at 20% above £12,570, rise to 40% between £50,271 and £125,140, and reach 45% above that, with the personal allowance tapering from £100,000.
- Separate from the petition, HMRC’s Rent a Room Scheme lets eligible homeowners earn up to £7,500 tax-free from letting furnished space in their main home, taking total tax-free income to about £20,070.
- Using the scheme requires reporting via self-assessment, and the £7,500 limit reduces to £3,750 if the rental income is shared.