The personal allowance provides tax relief at the highest rate of tax you pay.
For a basic rate taxpayer that's 20%. For a higher rate tax payer that's 40% (additional rate taxpayers do not benefit from the personal allowance, as the personal allowance is reduced by £1 for every £2 you earn over £100,000).
So let's take the current personal allowance of £8105 and apply it to two different people:
Person A earns £20,000. They get £8105 tax free so the calculation would be: £20,000 - £8105 = £11895. 20% of £11895 = tax due of £2379. Without the personal allowance the total tax due would be £4,000, meaning a saving of £1621.
Person B earns £50,000. £50,000 - 8105 = 41895. The
basic rate band is £34,370. 20% of £34370 is £6874. The remainder of £7525 is taxed at 40% = £3010. Total tax due is £9884. Without the personal allowance the tax due would be £13126, a saving of £3242.
Higher rate taxpayers therefore benefit twice as much from increases in the personal allowance than basic rate taxpayers.
As for low-paid and part-time workers, any further increases in the personal allowances doesn't help them once the allowance is high enough to cover all of their earnings. A personal allowance of £50,000 is no good to someone earning £6000pa as they would get their income tax-free on an allowance of just £6000 anyway, so further increases in the personal allowances don't help improve their lot at all. They do, however, help higher rate tax payers enormously.
