Uk Budget: Record January surplus driven by higher tax receipts

The uk budget posted a surprise £30. 4bn surplus in January, driven by a sharp rise in tax receipts that far outstripped spending and produced the largest monthly surplus on record. The figures arrive ahead of the Spring Statement in less than two weeks and change the near-term borrowing picture.

Uk Budget: what the numbers show

Official figures show total tax receipts in January were £133. 3bn, 13. 8% higher than the previous January. That uplift helped create a £30. 4bn surplus for the month, nearly double the prior January’s £15. 4bn and the highest monthly total since records began in 1993, without adjusting for inflation. Analysts had expected a smaller surplus; one forecaster had a forecast near £24bn.

Which taxes drove the surplus

The most notable increases came from capital gains tax, income tax and employers' National Insurance contributions. Capital gains tax receipts were nearly £17bn for January, about 69% higher than the same month a year earlier, reflecting disposals of assets ahead of an expected tax change. National Insurance contributions were up by £2. 9bn, while income tax receipts rose by £3. 6bn compared with last January. Self-assessed tax payments also provided the usual January uplift and reached a substantial total for the month.

Borrowing and the fiscal picture

Borrowing for the 10 months to January was £112. 1bn, 11. 5% lower than the same period a year earlier, though the total remains the fifth-highest on record for that span. The data imply the public finances are tighter than some forecasts expected and suggested the full-year borrowing path may be lower than previously projected, by about the order of tens of billions in one assessment. The Treasury has said borrowing for the year is forecast to be the lowest since before the pandemic.

Implications for the Spring Statement

The surplus gives the chancellor something positive to present at the Spring Statement in less than two weeks, but officials and economists cautioned that the public finances remain "finely balanced. " Growth in wages and the broader economy were described as slow in commentary accompanying the figures, and the boost in receipts this month largely reflects timing and specific tax drivers rather than sustained broad-based strength.

Outlook and conditional scenarios

If elevated tax receipts persist beyond the January peak—especially from capital gains and self-assessed payments—the fiscal deficit for the year could undershoot earlier forecasts. Conversely, if tax receipts revert toward typical monthly patterns and spending pressures continue, borrowing will remain a significant constraint on fiscal choices. The Spring Statement will be the next scheduled opportunity to update forecasts and show whether the January surplus changes short-term expectations.

Key takeaways

• January surplus: £30. 4bn, highest monthly total on record.
• Tax receipts: £133. 3bn for January, +13. 8% year-on-year.
• Capital gains tax: nearly £17bn, about +69% year-on-year.
• Borrowing: £112. 1bn in the 10 months to January, -11. 5% year-on-year but still historically large.