20th February 2015
Britain’s budget surplus hit a seven-year high of £8.8 billion last month, the Office of National Statistics (ONS) has reported.
Stronger tax receipts have put the country back on track to meet chancellor George Osborne’s borrowing target.
The surplus of £8.8 billion, which exclude public sector bands, is nearly double the £4.7 billion reported in January last year and means borrowing has fallen £6 billion to £74 billion in the financial year to date, compared to 2013.
January is typically the biggest month of the year for tax receipts as it is the time of the year when self-employed people file their returns and top rate taxpayers make income payments for the year 2013/14.
‘In a week of economic milestones, today we learn that January saw the largest monthly surplus in the public finances since the crisis, putting us on track to meet our borrowing forecasts and halve the deficit as a share of GDP this year,’ said Osborne.
‘Coming in a week where we have seen the employment rate reach record highs while the inflation rate has reach record lows, today’s good news is a further proof that the government’s long-term economic plan is working.’
Receipts received an extra boost this year as many employers decided to delay bonuses until April 2013 to take advantage of the cut in top rate tax from 50p to 45p that year.
Self-assessment income tax receipts totalled £12.3 billion in January, up from 16% – £1.7 billion – in January 2014.
While the increased tax take may be good news, the UK’s public sector net debt increased to £1.46 trillion in January, a total of 79.6% of GDP.
This is an increase of £86.1 billion last month compared with January 2014. The Office of Budget Responsibility has put this down to a rise in self-employment and low paid workers paying less tax overall.