Reform UK to increase tax threshold to £20000 to help those on benefits. Confused.

Wonderman

Hey all

There's something that's been bothering me.

Nigel Farage claims that people who work more than 16 hours a week are worse off and staying on benefits is better which is true in some circumstances.

But how is increasing the tax threshold to £20000 going to help them?

The most I've been taxed a week is £50 and that was when I was on emergency tax and then it was £20 a week on 21 hours a week. There's already a tax threshold and most part time workers don't come close to it.

Also the working under 16 hours rule and it affects your benefits only applies to legacy benefits... I thought Universal credit wasn't about the hours, but the money you earn and you get a threshold which is £300 something.

I'm confused.

Is Nigel farage talking through his but?

Thanks. Hope someone can help me understand this lol. I have disabilities so it's quite difficult.

211811

We want to live in a decent way after the pension, hence needs increase the tax free allowance as discussed above.

mirhadi

You're right to be sceptical, and the maths backs you up.

If you earn under £12,570 you already pay no income tax at all, so raising the threshold to £20,000 gives you exactly nothing. That covers most part-time work, which is your point.

Between £12,570 and £20,000 it does help, but less than it sounds. On £18,000 you currently pay about £1,086 a year in income tax — which is roughly the £20 a week you describe, so your figures are spot on. Take that to zero and you're £1,086 better off.

Two things eat most of it though.

National Insurance is a separate tax with its own threshold, also starting at £12,570. Raising the income tax allowance doesn't touch it. On £18,000 you'd still pay about £434 a year in NI either way.

And on Universal Credit, the taper claws back 55p of every extra £1 you keep. So that £1,086 tax saving reduces your UC by about £597, leaving you roughly £489 better off — not £1,086.

So for someone on UC and part-time hours, a £20,000 threshold is worth a few hundred a year at best, and nothing at all if you earn under £12,570.

On the 16 hours point, you're right there too. That's legacy benefits. Universal Credit doesn't count hours, it counts earnings, with a work allowance and then the 55% taper above it.

(Figures on 2026/27 rates — truetakehome.co.uk/income-tax-calculator/ if you want to run your own.)

vikingqueen

Deleted. wrong post!!

Mary_Scope

No worries @vikingqueen, were you able to find the correct post?

vikingqueen

https://forum.scope.org.uk/discussion/comment/1150020#Comment_1150020

I did thank you