Budget Resolution No. 9: Basic rate limit and personal allowance for tax years 2028-29 to 2030-31

Parliament voted on 2 December 2025 to approve Budget Resolution No. 9, which fixes the income tax basic rate limit and personal allowance for the three financial years running from 2028-29 to 2030-31. The resolution passed by 348 votes to 176, with the government's majority holding firm. In practice, the vote confirms that the thresholds determining how much of a person's income is tax-free, and where the basic rate of income tax applies, will remain frozen at their current levels through to the end of the decade rather than being raised in line with inflation or earnings growth.

The practical consequence of this decision is significant for working households. When the personal allowance and basic rate limit are held steady while wages and prices rise, more income is pulled into taxation over time, a process sometimes called fiscal drag. The resolution locks in that position for three further years beyond the existing freeze, meaning that by 2030-31 workers will continue to pay tax on a larger real share of their earnings than they would if thresholds had risen. The policy affects anyone earning above the personal allowance, which covers the vast majority of employed adults in the United Kingdom.

The vote divided almost entirely along party lines. Labour and Labour and Co-operative MPs provided all 348 votes in favour, with no defections recorded. Every Conservative, Liberal Democrat, Reform UK, Democratic Unionist Party, Plaid Cymru, Green and Traditional Unionist Voice MP who voted did so against the resolution. The opposition's joint rejection of the measure reflects a shared, though differently motivated, critique of the government's tax trajectory, ranging from Conservative arguments against high taxation to Liberal Democrat and Green objections from other directions. The resolution sits within the broader Budget package announced by the government and connects to related legislative activity in early 2026 on employer National Insurance contributions and industrial financial assistance, where opposition parties similarly tested the government's fiscal plans in committee.