Record January surplus boosts public finances as tax receipts surge

"Britain recorded its largest monthly budget surplus on record in January as rising tax receipts and a sharp fall in debt interest costs boosted the public finances. Figures from the Office for National Statistics show government revenues exceeded spending by £30.4bn in January, the highest surplus since monthly records began in 1993 and well above City forecasts of £23.8bn. January is typically a strong month for receipts because of self-assessment tax payments, but this year's figure far surpassed the £14.5bn surplus recorded in January 2025."

"The improvement was driven partly by a steep drop in debt interest payments, which fell to £1.5bn from £9.1bn in December. Lower borrowing costs have eased pressure on the Treasury's balance sheet after last year's market volatility. Total government revenues rose nearly 14 per cent year-on-year to £133.3bn. Income tax receipts increased by £12bn, while national insurance contributions rose by £2.9bn following higher payroll levies introduced last spring."

Government revenues exceeded spending by £30.4bn in January, the largest monthly surplus since records began in 1993 and well above forecasts. Seasonal self-assessment payments boosted January receipts, producing a surplus considerably larger than January 2025. Debt interest payments fell sharply to £1.5bn from £9.1bn in December, easing pressure on the Treasury. Total revenues rose nearly 14% year-on-year to £133.3bn, with income tax up £12bn and national insurance up £2.9bn after higher payroll levies. Borrowing across the first ten months totalled £112.1bn, 11.5% lower year-on-year and below OBR forecasts, though fiscal headroom remains fragile and no fresh tax rises or cuts are expected at the spring statement.

Read at Business Matters