Yahoo Finance UK records first July surplus since 2002 thanks to bumper tax receipts
An 11pc boost in self-employed tax receipts helped the UK to its first surplus in 15 years, according to the latest figures from the Office for National Statistics.
A July surplus of £0.12bn defied expectations of a deficit of £1bn as revenue exceeded spending by £184m.
The figures show that payments of self-assessed income tax increased by 11pc from July last year to £8bn, the highest level since records began in 1999.
However, public sector net borrowing, excluding public sector banks, for the first four months of the financial year is £1.9bn higher than this time last year, at £22.8bn.
And experts have warned that the July surplus, the first since 2002, is largely the result of comparable figures from 2016.
“The first surplus since 2002 is not a signal that the economy is in rude health,” said Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.
“Self-assessed tax payments were unusually low last year because the deadline for payments on account fell on a weekend, meaning that many payments were not received until August.”
As well as the self-assessed income tax, the Treasury also received a boost from a 5pc climb in value-added tax revenue.
The ONS said public sector net debt has jumped by £143.9m to £1.76 trillion since July last year, and now equates to 87.5pc of GDP.
Ruth Gregory, UK economist at Capital Economics, said the surplus is likely to be a “temporary blip”.
She said: “July’s public finances brought some cheer for the Chancellor after the run of fairly poor outturns seen so far this fiscal year.
“But this will probably prove to be just a temporary blip, rather than the start of a more sustained improvement.”
A spokesman for the Treasury said: “We are making good progress in strengthening our public finances and living within our means.
“Our national debt, at £65,000 for every UK household, is still too high. That is why we have a clear fiscal plan to reduce our debts and build a stronger economy for every household.”
