Income and corporation tax receipts rose to record levels and as a result the UK government borrowing fell to £9.4 billion in June. This is down £0.8 billion from the year before. Income tax receipts rose to £11.5 billion and corporation tax brought in £1.7 billion, according to the Office for National Statistics (ONS). These figures are both record monthly highs.
For the month of June, the result was the lowest borrowing figure since 2008. Despite this, many expected this to drop further to £8.5 billion. However, across the financial year so far, borrowing has fallen by £6.1 billion to £25.1 billion.
Government finances also received a boost of £117 billion last month because of a fine that Lloyds Banking Group paid over its handling of payment protection insurance (PPI) complaints. Not only that, but the Office for Budget Responsibility (OBR) forecast that public borrowing would be £69.5 billion this year. This was revealed in the summer Budget earlier this month.
At the end of June this year, public sector net debt was £1.513 trillion, or 81.5% of annual UK economic output. This is up from 80.8% in May.
By 2019, the government is aiming to eliminate the budget deficit and run a £10 billion surplus in 2020 as well as in future years. In the summer Budget, the chancellor George Osborne stated that there would be £37 billion of spending cuts during this parliament.
The government’s spending review in November will set out £20 billion worth of departmental budget cuts over the next five years.