£3,000 Tax Boost for Millions as Personal Allowance Hike Proposed

Millions of workers could see a £3,000 tax boost if plans to increase the personal allowance are implemented. Labour donor Dale Vince has suggested that this could be funded by changes to capital gains tax and Bank of England interest payments to commercial banks.

The current personal allowance is frozen at £12,570 until April 2031, but Vince proposes increasing it to £15,570. This would give people who are entitled to the full allowance an extra £3,000 of tax-free income.

Vince has suggested that ending the freeze on interest payments to commercial banks could generate a significant boost to economic growth. He claims that this could be done by stopping the Bank of England from paying interest on bank reserves held with it, which amounts to around £30 billion per year.