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Surging Tax Take Sends Uk To First July Budget Surplus In 3 Years

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http://uk.reuters.com/article/2015/08/21/uk-britain-borrowing-idUKKCN0QQ0R020150821

Britain's public finances recorded their first July surplus in three years, as the country's economic upturn spurred the strongest income tax receipts for the month since records began in 1997.

Finance minister George Osborne welcomed Friday's official figures, which also showed July was the 12th successive month of falling year-to-date public sector net borrowing, excluding banks.

Public finances have traditionally been in surplus in July, but tepid wage growth in the previous two years depressed the usual surge in payments from individuals filing self-assessed income tax returns.

The Office for National Statistics reported a public finance surplus, excluding banks, of 1.29 billion pounds ($2 billion) in July, almost exactly as forecast in a Reuters poll.

State coffers were boosted by 18.5 billion pounds of income tax receipts -- the biggest intake for July on record -- and up almost a billion pounds compared with a year ago.

Economists said the figures suggest the government could undershoot its borrowing forecast for the year of 69.5 billion pounds -- or 3.7 percent of economic output.

The joy joy happiness I'm feeling now is unbelievable. If we can achieve that surplus per month it would take around 97 years to pay off the national debt. What a recovery, this country is rocking....

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How many people died from the cuts to make this possible ? Of course we're not allowed to know 'cause IDS won't publish the stats.

Means nothing because when the asset bubble in housing bursts, the further bank bailouts will dwarf any savings the Tories make.

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Been waiting for this bit of smoke and mirrors to hit the news stands , this is just a guess but many in my trade and i suspect other trades are being hammered by d.o tax codes maybe only for a few weeks at a time but this must represent a significant amount of money going into the tax pot only for it to have to be returned at a later date /next year for many

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Given that self assessed income tax usually falls due in two instalments, one in January and one in July each year it is hardly surprising these are the months in which the government enjoys surpluses.

Edited by stormymonday_2011

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Given that self assessed income tax usually falls due in two instalments, one in January and one in July each year it is hardly surprising these are the months in which the government enjoys surpluses.

but it hasn't had a July surplus for 3 years... that is the minor significance of today's news

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but it hasn't had a July surplus for 3 years... that is the minor significance of today's news

Very minor given the yield of the self assessed second tax instalment is usually smaller than the first. By its nature tax raised on self assessment also reflects activity and earnings in the economy some time ago not today.

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It's good to issue positive figures on a day when the stockmarket is plunging - even if those figures are often massively revised as time goes on.

Edited by billybong

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Exactly stormymonday - end of July is one of 2 big payments a year. Also for context, £1.29Bn is about what we pay back in interest every single week on the current debt mountain - so still about £3Bn in debt if you include debt interest repayments for July, one of only two big self-assessment tax payment months in the year.

Edited by canbuywontbuy

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Other less-prominent headline: they just got in the highest Income Tax receipts since 1997.

I hadn't realised 1997 was a peak in income tax. I guess it kind-of makes sense, as 1997 was when Brown's so-called pensions raid started to divert money from investment in the productive economy towards property speculation, thus dealing the first big blow to real growth.

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Other less-prominent headline: they just got in the highest Income Tax receipts since 1997.

I hadn't realised 1997 was a peak in income tax. I guess it kind-of makes sense, as 1997 was when Brown's so-called pensions raid started to divert money from investment in the productive economy towards property speculation, thus dealing the first big blow to real growth.

..yes Brown ruined the UK economy from that date when we were the leading economy in Europe....many CEOs and directors no longer had worthwhile pensions and became reliant on annual bonuses...each year could be their last and therefore each year had to be a better bonus than the previous creating short term provisioning and greed and less medium term planning and building for the bad times ....short term boom profiteering through the bonus culture and long term losses.... :rolleyes:

Edited by South Lorne

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Britain's public finances recorded their first July surplus in three years, as the country's economic upturn spurred the strongest income tax receipts for the month since records began in 1997.

Are people supposed to believe that those tax receipt records only began in 1997 just 18 years ago. Amazing.

Apart from that it's remarkable that the Conservative goverment formed from a party that so often claims to be in favour of low taxation is bragging about high taxation which in earlier times they would have said helped the economy to grind to a standstill.

Edited by billybong

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Are people supposed to believe that those tax receipt records only began in 1997 j- ust 18 years ago. Amazing.

Apart from that it's remarkable that the Conservative goverment formed from a party that so often claims to be in favour of low taxation is bragging about high taxation which in earlier times they would have said helped the economy to grind to a standstill.

Aha! You and I may both have got hold of a wrong end of the stick.

I daresay what it means is that records in the form used today began in 1997, so older stats would be harder to compare. It also invalidates my previous post: I had misheard that "since 1997".

Higher tax receipts absolutely don't imply high taxation. They imply at least one and probably both of an improving economy and a better balance being struck on the Laffer curve. When the UK had the most stupendously high taxes in the 1970s was when the country went really bust; now it appears that, subject to a bunch of caveats, we're doing incrementally better than in the past.

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Aha! You and I may both have got hold of a wrong end of the stick.

I daresay what it means is that records in the form used today began in 1997, so older stats would be harder to compare. It also invalidates my previous post: I had misheard that "since 1997".

Higher tax receipts absolutely don't imply high taxation. They imply at least one and probably both of an improving economy and a better balance being struck on the Laffer curve. When the UK had the most stupendously high taxes in the 1970s was when the country went really bust; now it appears that, subject to a bunch of caveats, we're doing incrementally better than in the past.

I just commented on what I read in the article and it's quite possible to be mislead considering the apparently careless way that they often seem to word things. It seems to be a very precise lack of precision in the article's wording. Setting an unrealistic baseline date for comparisons is often deployed and that's often demonstrated in the financial charts published for public consumption.

Some of the stuff one comes across in the media just leaves one a bit amused at their nonsense and who knows what they really mean - clarity is probably too much to ask. There's several possible explanations for the lack of clarity of course.

I agree it could imply an improving economy (some hope - and I don't believe it is in real terms) and maybe that's what they want people to assume but from the article that's not clear either. It could equally just mean increased taxes without the economy doing any better. Maybe they'll release clarifications in due course - or more likely they won't. Osborne seemed to be celebrating the increase in tax just in its own right because it appears that's helped to create a surplus - mathematically at least.

Edited by billybong

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