Wednesday, 23 February 2011

At last, some good news about fiscal policy.

At last, we have some good fiscal news.

In January the government actually collected more tax than it spent. Tax receipts came in at £58 billion, some £6.4 billion higher than January last year. At the same time, government expenditures were £50.5 billion, just over £2 billion higher than last January. Collections on wealth and income related taxes were particularly strong.

Of course, January is always a good month for tax collections, and a single month doesn't make a trend. Let's keep the pessimism under control. The numbers were better than expected, and we should be thankful for that.

Finally, we can dare to hope that the public sector accounts might begin the long road to recovery.


Anonymous said...

Partly because peopel like us with our UK based business are still alive and paying required dues, but no thanks to EU/UK's crushing red-tape that stop us expanding here. So you ask, why is it still alive? Because our clients are 90% DE, HKG or ME ... but not UK. And you did you ask how our AU business is going? Brilliantly thank you!

Jim said...

Just remember the payments made now (Jan 2011) relate to the tax year 2009/10, the last year that 40% was the highest rate. So its entirely reasonable to assume that many people have brought forward earnings (paid themselves big dividends from private companies for example, and other ruses) to avoid the 50% rate that started in April 2010. So it may be that come Jan 2012, receipts will be correspondingly disappointing.

I personally just paid a large sum of tax - I can assure you that my business will not make the profits in 2010/11 that it made in 2009/10. I've got plenty of legitimate expenses to spend the money on without letting the tax man get his mitts on it.