Osborne takes record income tax haul as UK growth flies

Finance minister George Osborne welcomed Friday’s official figures, which also showed July was the 12th successive month of falling year-to-date public sector net borrowing, excluding banks.

Good news for Chancellor Osborne, who announced major steps to increase cuts in public spending, causing a surplus of £1.3bn (€1.8bn, €2.04bn), according to figures published by the Office for National Statistics.

Britain’s public finances recorded their first July surplus in three years, driven by the strongest tax receipts for the month since records began in 1997.

The public finances were boosted by 18.5 billion pounds of income tax receipts – the biggest intake for a July since records began in 1997 – and up nearly a billion pounds on July 2014’s haul.

ONS figures showed a £900 million, or 5.3%, improvement in income tax related payments for July compared to the same month previous year , taking them to £18.5 billion.

The latest independent forecast by the Office for Budget Responsibility calculated that it should fall by 21.1 per cent for the full 2015/16 period.

Before the recession, July had regularly seen a surplus, averaging £3 billion, thanks to corporation tax receipts.

Public sector net debt, excluding state-controlled banks, was 1.505 trillion pounds in June, equivalent to 80.8 percent of GDP.

The performance means the cutting of the deficit is running ahead of schedule. But with debt over 80 per cent of GDP, the job is not done’.

But if last month’s trend continued, the full-year deficit could undershoot the OBR forecast by around £2 billion.

Analysts at Capital economics said that public finances are benefiting from the strength of the economic recovery.

In the financial year so far, borrowing is down £7.3bn to £24bn compared with the same period last year. But Kern was cautious about the longer-term and Britain’s struggle to shake off the legacy of the financial crisis.