Tax receipts hit record high

The taxman is sitting on an annual rise in receipts of 4.4 per cent, trumping the predictions of even the forecaster backed by the government.

In fact, fresh figures show that HM Revenue & Customs collected £515.3billion in taxes in 2014-15, compared with £493.6bn in the previous tax year.

That 4.4% growth rate in tax receipts was helped by a surge between April and July, when the cash flowing into the exchequer surpassed what the Office of Budget Responsibility reportedly forecast for the full financial year.

Standing at £18.5bn, July also represents a record high in monthly tax receipts, partly why the UK has achieved its first surplus on the public finances for three years.

Firms paying their first corporation tax instalment on this year’s profits drove the high, as did millions of self-assessors paying up amid lower borrowing by local and central government.

Michael Martins, economic analyst at the Institute of Directors, reflected: “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 for another business group, the British Chambers of Commerce, said progress in cutting the deficit gave Mr Osborne "greater flexibility" in trying to boost growth.

Mr Kern added: "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."

An upbeat George Osborne, the chancellor, said: “With more tax coming in this month that the government spent, borrowing so far is almost £7.5billion lower than last year.

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

But “the job is not done”. Pointing to debt at over 80% of GDP, Mr Osborne added: “That is why we continue to work through our long term economic plan….and secure a better economic future for working people.”