THE UK’s public finances have recorded the highest surplus in any month since records began in 1993 – but experts have warned that this is no cause for celebration with government debt still high.
The figure of £30.4 billion for the tax receipt month of January was double the same month last year and £6.3 billion above the Office for Budget Responsibility’s November forecast, the latest data released today shows.
The current budget, borrowing to fund day-to-day public sector activities, was in surplus by £40.9 billion in January 2026. This brings the total current budget deficit in the financial year to January 2026 to £55.9 billion.
Combined self-assessed Income and Capital Gains Tax receipts are £46.4 billion in January 2026, £10.5 billion more than January 2025.
Borrowing in the financial year to January 2026 was £112.1 billion. This was £14.6 billion or 11.5% less than in the same 10-month period a year ago, but still the fifth-highest April to January borrowing on record.
Borrowing in the financial year to January 2026 was 3.7% of gross domestic product (GDP) – this was 0.7 percentage points less than in the same 10-month period a year ago.
This comes as retail sales figures bounced back in January by rising 1.8% and inflation ticked down to 3% from 3.4% – but unemployment has gone up to 5.2%.
Highest surplus since records began
Office for National Statistics chief economist, Grant Fitzner, said: “January – which is traditionally a strong month for self-assessed tax receipts – saw the highest surplus since monthly records began.
“Revenue was strongly up on the same time last year, while spending was little changed, due to lower debt interest payments largely offsetting higher costs on public services and benefits.
“Across the first ten months of the current financial year, borrowing is lower than the same period a year ago.”
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said that, despite the record surplus, the government is still in huge debt.
He added: “January is always a bumper month for tax receipts, with so many payments due from the self-employed and capital gains.
“Despite this surging surplus in the monthly budget, there is still a financial year deficit of over £50 billion with little time to influence this before year end.”
It gives the Chancellor breathing room, not a blank cheque
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said the government is still borrowing too much.
She continued: “Despite the bumper January tax receipts, borrowing for the year still stands at £112.1bn, the fifth highest on record for this point in the financial year. Yes, it is 11.5% lower than last year and down to 3.7% of GDP, which shows some fiscal progress but the government is still running a sizeable current budget deficit overall.
“This surplus signals resilience in tax receipts, not a fully repaired public balance sheet. It gives the Chancellor breathing room, not a blank cheque.”
We’re running the country like a debt collection agency
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said small businesses and the high street are not benefiting from the government’s attempts to balance the books.
He added: “A £30.4 billion surplus isn’t a success, it’s a symptom of an economy being cannibalised. While the Treasury pops champagne over ‘balanced books,’ the real world is staring at hollowed-out high streets and strangled disposable income.
“Doubling the surplus since last year, driven by a £10.5 billion tax grab from the self-employed, is a punch in the gut for the small businesses that actually anchor our communities. In our AI Audits, we see this ‘spreadsheet-first’ rot constantly: firms obsessed with a single efficiency metric while their actual operation withers.
“The government is doing the same, trading long-term growth for a tidy ledger. If the price of a fiscal surplus is record inequality and a stagnant market, it isn’t a win, it’s an expensive failure of imagination. We’re running the country like a debt collection agency rather than a society. Is this a thriving economy, or just a very well-funded funeral for the British high street?”
Photo by Ehud Neuhaus on Unsplash.
