The Office for National Statistics (ONS) has announced that the UK government experienced a £5.4bn tax surplus in January, far surpassing expectations.
This figure is much higher than the £8bn deficit predicted by economists and £5bn larger than the forecasted amount by the Office for Budget Responsibility (OBR).
The record-breaking tax revenues were due to the highest monthly self-assessed income tax receipts since records began in 1999, equating to £21.9bn, and capital gains taxes totaling £13.2bn.
These tax surpluses were instrumental in balancing the high costs of energy bill support and historic customs duties owed to the EU.
However, despite the unexpected tax surplus, debt interest payments rose to £6.7bn in January, the highest recorded January figure due to higher inflation.
This increase contributed to the UK government borrowing £116.9bn this year to cover the gap between tax receipts and public spending.
The government has faced significant pressure from Conservative backbenchers to reduce taxes, but with debt at historically high levels, the government has warned that it cannot do so.
The Chancellor of the Exchequer, Jeremy Hunt, stated, “We are rightly spending billions now to support households and businesses with the impacts of rising prices. But with debt at the highest level since the 1960s, it is vital we stick to our plan to reduce debt over the medium-term. Getting debt down will require some tough choices, but it is crucial to reduce the amount spent on debt interest so we can protect our public services.”
