Cutting income tax to tackle the cost-of-living crisis

The Liberal Democrats will take 2.5 million people out of paying income tax altogether by raising the tax-free personal allowance to £15,000.

Our bold plan would put £680 back in people’s pockets, and also take 750,000 ordinary people out of paying the higher 40p tax rate.

People are struggling in a cost-of-living crisis. The Conservatives put their taxes up by stealth, and Labour have made it worse – the equivalent of a 3p rise in income tax.

There’s no way to end the cost-of-living crisis without cutting income tax. Liberal Democrats have done it before – cutting taxes by hundreds of pounds and taking 3.4 million people out of paying income tax altogether.

We'll do it again now, taking 2.5 million people out of paying income tax and giving most people a £680 tax cut, by raising the tax-free personal allowance (and the national insurance threshold) to £15,000.

We’ll also raise the point at which the higher 40p rate of tax kicks in, taking more than 750,000 people out of paying it. Millions of ordinary people – including nurses and teachers – should not be paying a rate designed for stockbrokers and merchant bankers.

Unlike Reform, who claim they’d cut taxes by slashing £22 billion of support for disabled people, we'd pay for these tax cuts through the proceeds of growth when we tear down the damaging Brexit trade barriers.

Our plan for a new Growth and Defence Partnership with the EU is forecast to secure a growth dividend worth £27 billion a year. And we will give £17 billion of it straight back to the British people in the form of our tax cuts.