Bumper tax receipts boost Treasury coffers
The Government's finances were boosted by bumper tax receipts last month as high wage inflation pushed workers into paying more income tax and national insurance but it still was not enough to stop the Government having to borrow yet more money to pay for public services. VAT and corporate tax also raise more than expected. The Office for Budget Responsibility (OBR) forecasted government borrowing at £22bn, but it came in at £18.5bn due to higher tax revenues. Public sector borrowing was £54.4bn - £7.5bn less than forecast by the OBR. The Institute for Fiscal Studies estimates that 14% of adults will pay the 40% higher rate of income tax by 2027. Despite the strong tax revenues, the Chancellor said he still does not have enough room to spend big on pre-election giveaways. The debt ratio rose to 101% of GDP in June, the highest since 1961. The Government paid £12.5bn on debt interest last month, less than the record £20bn recorded in June last year.