I made an estimate of the cost of raising the personal allowance from £12,500 to £20,000, which I think is by far the worst of Reform's policies.
There a 24.9 million FT workers in the UK, the vast majority of whom make more than £20,000. They would experience a tax cut of 20% on £7,500 - costing £37.4 billion. However, because it's an inframarginal tax cut, it wouldn't encourage any FT workers to increase their labour supply, unless they are in the small minority who earn under £20,000 (or about £10 per hour). It may even cause some FT to reduce the number of hours they work, as they would be able to make more money on an hourly basis.
There are about 8.3 million PT workers in the UK, some of whom earn under the current personal allowance threshold, and some between this and Reform's proposed threshold (with very few earning above Reform's target), meaning it would act as a mixture of marginal and inframarginal cuts. It is difficult to make a precise estimate, but I think we can assume the effect on revenues will be negative but small. It's likely fewer people will extend their hours enough to earn signficiantly more than £20,000 than will continue to earn between £12,500 and £20,000 and experience an inframarginal cut. However, there are only a third as many PT as FT workers, and they earn far less money, so the effect will be an order of magnitude smaller than the above figure on FT workers. It will likely improve the labour supply of part-time workers, but this is less important than the effect on FT workers for the same reasons.
Some of the the £37.4 billion will be recouped by a longer withdrawal of the personal allowance above £100k. Only about 3% of FT workers earn more than £100k, and most of them don't make it to £140k. Even if we assumed everyone who earns more than £100k earns more than £140k, this will only recoup £1.1 billion, which is likely smaller than the cost of extending the policy to PT workers, and obviously comes at the expense of making this particular tax distortion worse.
So not only is the policy expensive (~1.3% of GDP or ~3.3% of the budget), but will likely fail at its primary policy goal (extending labour supply), and strengthen the worst tax distortions for professional level salaries.
I made an estimate of the cost of raising the personal allowance from £12,500 to £20,000, which I think is by far the worst of Reform's policies.
There a 24.9 million FT workers in the UK, the vast majority of whom make more than £20,000. They would experience a tax cut of 20% on £7,500 - costing £37.4 billion. However, because it's an inframarginal tax cut, it wouldn't encourage any FT workers to increase their labour supply, unless they are in the small minority who earn under £20,000 (or about £10 per hour). It may even cause some FT to reduce the number of hours they work, as they would be able to make more money on an hourly basis.
There are about 8.3 million PT workers in the UK, some of whom earn under the current personal allowance threshold, and some between this and Reform's proposed threshold (with very few earning above Reform's target), meaning it would act as a mixture of marginal and inframarginal cuts. It is difficult to make a precise estimate, but I think we can assume the effect on revenues will be negative but small. It's likely fewer people will extend their hours enough to earn signficiantly more than £20,000 than will continue to earn between £12,500 and £20,000 and experience an inframarginal cut. However, there are only a third as many PT as FT workers, and they earn far less money, so the effect will be an order of magnitude smaller than the above figure on FT workers. It will likely improve the labour supply of part-time workers, but this is less important than the effect on FT workers for the same reasons.
Some of the the £37.4 billion will be recouped by a longer withdrawal of the personal allowance above £100k. Only about 3% of FT workers earn more than £100k, and most of them don't make it to £140k. Even if we assumed everyone who earns more than £100k earns more than £140k, this will only recoup £1.1 billion, which is likely smaller than the cost of extending the policy to PT workers, and obviously comes at the expense of making this particular tax distortion worse.
So not only is the policy expensive (~1.3% of GDP or ~3.3% of the budget), but will likely fail at its primary policy goal (extending labour supply), and strengthen the worst tax distortions for professional level salaries.