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Higher Tax Receipts Help UK Finances

by Robert Lee,, London

22 December 2011

The UK's November tax receipts were up GBP2.6bn (USD4bn) on last year, helping to drive down public sector borrowing for the month.

The latest Office of Budget Responsibility (OBR) figures show that public sector net borrowing totalled GBP18.1bn in November, around GBP2.3bn lower than in the same month last year, and below market expectations of GBP19.7bn.

The OBR attributes November's lower borrowing figures to strong growth in receipts compared to last year, and to low growth in spending, mainly due to the receipt of a significant one off repayment from the European Union, which is counted as negative expenditure.

Total tax receipts reached GBP39.2bn, up 7.1% from the GBP36.6bn recorded in November, 2010. The OBR says that year-on-year growth in value added tax (VAT) revenue was strong, reflecting the rise in the standard rate of VAT to 20% in January this year.

Income tax in November also showed buoyant growth, Some of this is due to growth in pay as you earn (PAYE), but part of the rise is said to reflect temporary effects from other elements of income tax.

Income and wealth taxes brought in GBP11.9bn in November, up from GBP10.9bn (9.6%). Of this, corporation tax totalled GBP1.1bn, down from GBP1.3bn the previous year. Taxes on production totalled GBP16.7bn, of which GBP8.8bn was VAT, up from GBP8bn (9.8%) in November, 2010.

Total receipts amounted to GBP339bn in April-November, up from GBP323.4bn (4.8%) at the same point last year. VAT, at GBP73.1bn, rose 16.8% from GBP62.8bn, while income and wealth taxes contributed GBP118.7bn, rising 1.4% from GBP117.1bn. Corporation tax receipts were down 1.3% to GBP28.6bn.

TAGS: tax | value added tax (VAT) | public sector | corporation tax | United Kingdom | revenue statistics | individual income tax

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