No 258: Lots of Lovely Tax Money!

A PLEASANT surprise for the UK Government - public finances for January were in surplus, with £5.4bn more received in tax than was spent.

It seems there were two reasons for this. Self-employed workers (e.g. tradespeople like plumbers, business workers like consultants) pay their income tax once a year. The deadline is the end of March (the end of the financial year) but it seems that more people than ever decided to pay early, hence a large boost to tax revenue.

There has also been less spending than expected on subsidies for household energy bills, since the prices of gas and oil have not gone by as much as forecast.

This surplus has led to calls for the government to cut taxes / increase spending in the March Budget. But Chancellor Jeremy Hunt says this is only a blip, and the wider picture is still excessive government debt from the shocks of Covid and the Ukraine War (see the chart below). Nonetheless, striking state workers like nurses and teachers will certainly think it makes their case for the government to pay them higher wages stronger.

As always, my summary is only that, so make sure to read the full story: https://www.bbc.co.uk/news/business-64705051