The regional impact of increasing the personal tax allowance

My brief for the Sheffield Political Economy Research Institute on the differential regional impact of the Budget 2014 decision to increase the income tax personal allowance.

In this brief the Sheffield Political Economy Research Institute (SPERI) considers the differential regional impact in England of raising the income tax personal allowance – a measure announced by George Osborne at the Budget on 19th March 2014. The measure has been championed by both coalition partners as a form of support for the low paid workers. However, the extent to which individuals benefit depends on the extent of their income that is ‘taxable’, and the proximity of their income to other tax thresholds. The evidence presented in this brief shows that those who do not benefit at all – as a result of earning less than the current allowance – are more likely to live in Northern regions (particularly Yorkshire and the Humber) and the South-West. The measure therefore neither benefits the lowest paid, nor alleviates regional inequality.

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