Bumper tax receipts swell public finances in January

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A boost in self-assessment tax receipts and a bumper flow of capital gains tax to the exchequer has sent the government’s borrowing bill to its lowest January level in 17 years.

The boost to income generated a surplus of £9.4bn, the highest January surplus since 2000.

However, the surplus for January 2017 was only £300m higher than the same month last year, which was less than City economists had expected.

The latest data means the budget deficit for the year – the difference between tax income and government spending – is 21.6% lower than the same time last year.

In the financial year to date, since last April, public sector net borrowing declined by £13.6bn to £49.3bn, compared with the same period in the previous financial year. The data excludes public sector-owned banks such as Royal Bank of Scotland.

The modest boost is expected to put the chancellor, Philip Hammond, in a position to ease some of the Treasury’s planned austerity in the next financial year when he stands up to deliver his first full budget in a fortnight.

A Treasury spokesman said: “We remain committed to returning the public finances to balance and building on our progress in reducing the deficit from 10% to 4% of GDP over the last six years. Next month the chancellor will deliver his spring budget based on updated forecasts from the OBR.”

The Office for National Statistics said self-assessed income tax and capital gains tax receipts increased by £2bn to £19.8bn in January compared with January 2016, pushing the total to the highest January since 1999, when records began.

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