£3k Tax Boost for Millions as Personal Allowance Hike Gets Underway

Proposals to increase the personal allowance from £12,570 to £15,570 could give millions of workers a £3,000 tax boost.

The plan, reportedly being examined by Andy Burnham and Chancellor John Healey ahead of the October Budget, would be funded by changes to capital gains tax and Bank of England interest payments to commercial banks.

Dale Vince, a Labour donor, suggested that stopping the Bank of England from paying commercial banks interest on their reserves could generate around £20 billion, which is enough to cover the cost of restoring the income tax freeze.

Vince claimed that this would be a 1.2% GDP growth in year one and double GDP growth by restoring the income tax allowance.