Chancellor Rachel Reeves secured an extra £5.5 billion in tax revenue last month, official data reveals, a significant boost that arrived even before her latest Budget measures come into force.
November's Tax Windfall
According to the Office for National Statistics (ONS), central government receipts from tax and National Insurance Contributions (NICs) rose by 7.3% in November 2024 compared to the same month last year. This increase brought in a total of £63.5 billion, up by £2.5 billion.
The breakdown of this surge shows notable gains across several major taxes:
- Income tax receipts increased by £1.2 billion.
- VAT revenue was up by £800 million.
- Corporation Tax receipts grew by £400 million.
A significant driver was a £3 billion boost from National Insurance, with contributions reaching £17.2 billion. This jump is largely attributed to changes in employer NICs rates that took effect in April.
Rising Costs Offset Gains
However, this substantial revenue increase was partially offset by higher government spending. The cost of social benefits, including the state pension, rose by £1.5 billion to £26.8 billion, due to annual upratings.
Furthermore, departmental spending on goods and services increased by £800 million to £38.2 billion, reflecting ongoing pressures from public sector pay rises and inflation.
The Borrowing Picture: A Mixed Bag
The combination of higher tax income and a slight easing in debt interest costs meant that overall government borrowing in November was lower than in the same month last year. In fact, ONS senior statistician Tom Davies noted it was the lowest November borrowing figure in four years.
Yet, the broader financial year picture tells a more concerning story. For the period from April to November, public sector borrowing reached £132.3 billion. This is £10 billion more than during the same eight months last year and represents a record high for that period, surpassed only by the extraordinary borrowing during the 2020 Covid-19 pandemic year.
This annual total was worse than many economic analysts had forecast, highlighting the persistent strain on the public purse despite rising tax takes.
The government continues to accumulate significant debt, setting the challenging fiscal backdrop against which future Budget decisions will be made.
