Finance (No. 2) Bill Committee: Amendment 3
185Ayes
344Noes
Defeated · majority 159 · Government won119 did not vote
648 Members · Aye 185 · No 344 · DNV 119 · grey dots in centre are abstentions
Analysis
Commons
Commons
Parliament voted on 12 January 2026 to reject Amendment 3 to the Finance (No. 2) Bill, which would have required HMRC to proactively notify individuals who would pay income tax for the first time, or move into a higher tax band, as a result of frozen income tax thresholds. The amendment was defeated by 344 votes to 185, Division 401. The vote concerns fiscal drag, the process by which frozen tax thresholds pull more people into higher tax bands as wages rise with inflation. The Liberal Democrats cited Office for Budget Responsibility forecasts suggesting that by 2030, around 9.4 million additional people will be brought into higher tax brackets as a result of threshold freezes. The amendment would have required HMRC to write to affected individuals before the start of the relevant tax year, explaining how frozen thresholds affected their liability and where they could find further guidance. The vote divided almost entirely along government versus opposition lines. All 337 Labour and Labour and Co-operative MPs who voted opposed the amendment, while Conservatives, Liberal Democrats, the SNP, the DUP, Plaid Cymru and most others supported it. Reform UK had six members with no vote recorded. The threshold freeze was originally introduced under the Conservatives and has been continued by the current Labour government, a point that generated sharp exchanges in the debate.
Voting Aye meant
Support requiring HMRC to proactively notify people who will pay more income tax due to frozen thresholds, arguing that taxpayers deserve transparency about 'stealth tax' increases affecting their finances.
Voting No meant
Oppose the notification requirement, with Labour arguing that tax impact information is already publicly available and that the amendment is unnecessary given existing HMRC guidance and published tax notes.
Each row is one party. The stacked bar gives the within-party split of Aye / No / Absent; the columns on the right give the raw counts. The whip column shows the published party position — “Free vote” means the whip was formally removed for this division.
Party
Whip
Aye / No / Abs
Aye
No
Abs
Labour Party
Whipped No
0
302
59
Conservative and Unionist Party
Whipped Aye
94
0
22
Liberal Democrats
Whipped Aye
63
0
8
Labour and Co-operative Party
Whipped No
0
35
7
Independent
—
5
4
4
Scottish National Party
Whipped Aye
9
0
0
Reform UK
—
2
0
6
Sinn Féin
—
0
0
7
Democratic Unionist Party
Whipped Aye
5
0
0
Green Party of England and Wales
—
0
2
2
Plaid Cymru
Whipped Aye
4
0
0
Social Democratic and Labour Party
—
0
0
2
Your Party
—
0
2
0
Alliance Party of Northern Ireland
—
1
0
0
Restore Britain
—
0
0
1
Speaker
—
0
0
1
Traditional Unionist Voice
—
1
0
0
Ulster Unionist Party
—
1
0
0
Source · Hansard · UK Parliament Votes API · whip status from announced positions; “free vote” indicates the whip was formally removed
Government measures are fair, necessary, and progressive; they raise revenue from those undertaxed relative to employees while protecting public services and maintaining lowest borrowing levels.Labour · Voted no · Read full speech (11,197 words) →
Bill represents broken manifesto promises and a 'war on landlords,' savers, and small businesses; threshold freeze and asset income tax hikes total £23 billion and will harm ordinary working people and enterprise culture.Conservative · Voted aye · Read full speech (4,456 words) →
Dividend tax increase is right because wealth taxation has not kept pace with economic change; comparative evidence from France shows it encourages reinvestment and is easily implementable.Labour · Voted no · Read full speech (1,788 words) →
Tax changes add unwarranted complexity, burden small businesses, risk unintended rental market consequences, and strain HMRC resources; impact assessments essential before implementation.Liberal Democrat · Voted aye · Read full speech (1,593 words) →
Changes overtax risk and enterprise, destroying incentive culture; dividend taxation contradicts government's own growth objectives and continues damaging trend of taxing return on investment.Conservative · Voted aye · Read full speech (292 words) →
Tax changes hit lower and middle-income families unfairly; 4.8 million more individuals will pay higher rate and 600,000 will enter additional rate, while millionaires can afford it.DUP · Voted aye · Read full speech (505 words) →
Government claims of fairness contradicted by numerous U-turns since Budget announcement; questions credibility of stated good effects.Conservative · Voted no_vote_recorded · Read full speech (53 words) →
Sources
Division dataUK Parliament Votes API
DebateHansard · Commons
Stance analysisAI analysis · Claude 4.x
LicenceOpen Parliament Licence v3.0