HMRC tax receipts reach record high

HM Revenue and Customs (HMRC) has reported an annual increase in tax receipts of 4.4 per cent; surpassing even the predictions of the forecaster backed by the Government.

Latest figures show that HMRC recouped £515.3bn in 2014-15 tax receipts, compared with £493.6bn in the previous tax year.

The increase in tax receipts was aided by a surge in Q2 2015, when the funds flowing into the exchequer trumped even the forecasts of the Office of Budget Responsibility for the full financial year.

July itself represents a record high in monthly tax receipts of £18.5bn and is partly why the UK has managed to record its first surplus on public finances in more than three years.

Businesses paying their first corporation tax instalment on this year’s profits also underpinned the high, along with the millions of self-assessors paying up amid reduced levels of borrowing by central and local government.

Michael Martins, economic analyst, Institute of Directors (IoD), said: “The fact that the Government ran a surplus, for the first time since 2012, highlights the strength of the UK’s economic recovery.”

David Kern, chief economist, British Chambers of Commerce, believes the Government is making progress in cutting deficit, giving Chancellor, George Osborne “greater flexibility” in attempts to boost growth.

“This must include investing in infrastructure and boosting exports. Only by doing this will the UK be able to build an enterprising economy that can deliver sustained growth over the longer term,” added Kern.

Chancellor, George Osborne, confirmed that the government’s borrowing is almost £7.5bn lower than last year.

“The recovery is well-established, tax revenues are up and we have more than halved the deficit,” said Osborne.

However, Osborne insists the job “is not [yet] done”; pointing to outstanding debt at over 80 per cent of GDP.

“That is why we continue to work through our long term economic plan … and secure a better economic future for working people.”

Date published 26 Aug 2015 | Last updated 26 Aug 2015