Tax income dives as government borrows £8bn in July

A drastic drop in tax returns has forced the government to borrow in July for the first time in over a decade.

It has been 13 years since the government failed to register a surplus in July, normally a bumper month for tax receipts. Last year the surplus in July was £5.2m but in 2009 the government was forced to borrow £8bn, raising public debt to £800bn – or £13,000 for every person in the country, reported the Times.

The borrowing has been blamed on falling tax revenues and rising costs. Corporate tax dropped 38% and takings from income tax and CGT fell 14%. At the same time spending on benefits rose 10% last month.

It is thought that the government could now miss its borrowing forecast of £175bn this year and could go as high as £200bn.