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The Telegraph
The Telegraph
21 Feb 2023

Record tax revenues from workers and capital gains taxes helped to offset massive spending on energy bill support and soaring debt interest payments, official figures show.

In the final set of public borrowing figures before Jeremy Hunt delivers his Spring Budget, the Office for National Statistics (ONS) said the Government received £5.4bn more in taxes in January than it spent on public services.

This is much higher than the £8bn deficit forecast by economists and £5bn larger than forecast by the Office for Budget Responsibility (OBR), the Government's tax and spending watchdog.

January is traditionally a month where the Treasury receives more than it spends as businesses and workers, including the self-employed pay their tax bills.

The ONS said self-assessed income tax receipts were £21.9bn in January. This is the highest monthly figure since records began in 1999 and a third higher than receipts received a year ago.

Capital gains taxes, which are paid on the profits of disposed assets such as buy-to-let properties if they have increased in value, stood at £13.2bn, another record high.

The ONS said January’s "high annual self-assessed tax receipts" were partly offset by "substantial spending on energy support schemes and large one-off payments relating to historiccustoms duties owed to the EU."

This includes a partial payment to Brussels to settle a long-standing dispute over textiles and footwear imported into the UK from China.

Debt interest payments also soared to £6.7bn in January, which was the highest January figure recorded, due to higher inflation pushing up debt servicing costs.

The Government has borrowed £116.9bn so far this year to plug the gap between tax receipts and public spending. This is £7bn more than a year ago but £30.6bn less than OBR forecasts.

Government borrowing has continued to surge after the decision in October to subsidise energy bills so that typical households pay no more than £2,500 annually.
From April, the state will lower its support, raising the cap on bills to £3,000.

Debt also remains at historically high levels. At 98.9pc of gross domestic product (GDP), Britain's debt share is currently at levels last seen in the early 1960s.

The Treasury has sought to play down the prospect of major tax cuts in the Budget as it focuses on reforms to get more people back into work.

Mr Hunt said: “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.”

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