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Families across Scotland “are paying the price” for the UK Government’s freeze on the tax-free personal allowance, the SNP has said.
The party said research by the House of Commons Library, commissioned by the SNP, shows millions of workers across Scotland and the UK are paying an additional £700 a year in income tax.
By default, the standard personal allowance is legally indexed to rise annually with inflation.
The previous Conservative government froze the income tax personal allowance in March 2021, and continued to freeze it in the following years.
The Labour Government announced in the autumn budget it would continue to freeze the allowance at the 2021/22 rate of £12,570 a year, and it currently plans to continue this freeze until 2030/31.
SNP Westminster leader Dave Doogan said the policy “disproportionately affects low-income workers”, as he called on the UK Government to unfreeze the allowance.
He said: “Brexit Britain is broken and families across Scotland are paying the price for the Labour Government’s record of failure, its creeping stealth taxes, and the dire state of the UK economy.
“The news that millions of workers are £700 a year worse-off, as a result of the Labour Party’s freeze on the tax-free personal allowance, will stick in the craw for the majority of hard-pressed families who are struggling to get by as the cost of living in the UK continues to soar out of control under the Labour Government.
“This punitive Labour Party policy hits every income taxpayer in Scotland, and across the UK, and it disproportionately affects low-income workers and state pensioners, who are increasingly being forced to hand more of their already-squeezed incomes back to the UK Government.”
On the basis of current forecasts, the analysis estimates the personal allowance would be around £17,440 by 2030/31 if it increased by inflation.
With the UK Government planning to continue its freeze until then, the data shows workers will be down £974 by the end of the decade as a result.
Mr Doogan continued: “If nothing changes, workers will soon be £1,000 a year worse off under Labour Party plans to freeze the personal allowance until the end of the decade, and will have lost a total of almost £6,000 each since the freeze began.
“People are really struggling to get by as bills soar in Brexit Britain. The Labour Government should be helping them – not making the cost of living even more expensive.
