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Record tax take sees borrowing fall but departments still face more cuts

22 Jul 2015

Income and corporation tax receipts achieved record monthly highs in June - bringing £11.5bn and £1.7bn respectively into Treasury coffers.

Figures from the Office for National Statistics (ONS) also show that the Government received £117m of extra income from a fine paid by Lloyds Banking Group over PPI complaints.

The result was that UK government borrowing fell to £9.4bn in June, down £0.8bn from a year earlier.

However, Chancellor George Osborne has launched the first phase of his spending review - to be published in November - by requiring Whitehall departments to come up with plans for cuts of up to £20bn. Each unprotected department has been asked to model savings plans of 25% and 40% of their budget.

These £20bn savings - plus the £12bn of welfare savings and £5bn of tax avoidance measures already announced - are intended to make up the £37bn required to return the country’s finances to surplus by 2020, under plans detailed in the second Budget earlier this month.

A Treasury spokesperson claimed that the borrowing figures showed the Government's deficit reduction plan was working but that ‘the job is not done’.