January 2012 tax receipts at a 14 year year high
UK figures released today show that public finances to be their best in fourteen years with a surplus of £7.8 billion due to higher tax receipts and lower local government borrowing. The National Debt figure has just dropped below the psychologically significant £1 Trillion.
There are a few significant reason for a high January tax take:
- January is always a high month for self assessment income taxation receipts whereby in addition to the balancing payment for 2010/11 clients also have to make the estimated first payment on account for the currant year 2011/12. But that does not explain it all – normally if profits are flat or falling the estimated payment on account is the same as the prior year or reduced. The more plausible reasons are the next two points.
- Corporate tax receipts – many companies have 31 March year ends and the corporation taxation payment date is 1 January. So perhaps corporate taxation take is up?
- VAT is now 20% having gone up from 17.5% on 1 January 2011. So assuming that spending is in line with this 14% increase in VAT then this may explain the bulk of the increased tax take.
Tax receipts came to £60.9 billion, the highest since the Office for National Statistics records began in 1998.
Government borrowing is down by £15.7 billion to £93.5 billion.
That still leaves an annual UK Deficit of £32.6 billion which is added on the the National Debt which has now dropped back to below £1 trillion.
Let’s hope that George will be generous on 21 March 2012, Budget day !