Government taxes up 12% yoy to £50bn in April

Struggling Brits were warned today that they will face another 50 percent of energy prices in October – while Boris Johnson held a crisis cabinet over the cost of living.

Ofgem chief executive Jonathan Brearley revealed his latest price cap estimate when he testified to MPs on the Business Committee.

He said although the numbers were ‘uncertain’ the situation has worsened and the expectation for the new level was £2,800 for an average family – compared to £1,972 at the moment.

The grim message will pressure the prime minister to announce more aid for families struggling to make ends meet as inflation rises.

However, ministers still seem to be bickering over whether or not to impose a windfall tax on energy companies’ rising profits, as Tory calls for immediate tax cuts.

There are claims today that Chancellor Rishi Sunak is preparing a levy targeting renewable electricity producers and oil and gas producers to boost revenues.

Meanwhile, the Treasury and Downing Street have taken different positions on the idea of ​​reinstating the £20 a week increase in Universal Credit. No10 insisted yesterday that nothing is off the table while Chief Secretary Simon Clarke dismissed the prospect.

Official figures today showed that government tax revenues are growing at an annual rate of 12 percent.

The Treasury took in £50.2bn in April – £5.5bn higher than the same month last year after national insurance was increased.

The data also showed that the cost of the £150 tax relief previously pronounced by Mr Sunak has already been recovered from other local government spending.

Mr Brearley told MPs: ‘I am afraid to say that conditions in the global gas market have deteriorated since the Russian invasion of Ukraine. Gas prices are higher and highly volatile. Sometimes they have now reached more than 10 times their normal level

“I know this is a very troubling time for customers, but I need to be clear with this committee, with customers and with the government about the likely price implications for October.

“So I will write to the Chancellor later today to give him our latest estimates of the price ceiling.

“This is uncertain, we are only halfway through the price cap, but we expect a price cap in October to be close to £2,800.”

Ofgem chief executive Jonathan Brearley revealed his latest price cap estimate as he testified to MPs on the Business Committee

The grim message will pressure the prime minister (pictured holding the cabinet today) to announce more aid for families struggling to make ends meet as inflation rises

The grim message will pressure the prime minister (pictured holding the cabinet today) to announce more aid for families struggling to make ends meet as inflation rises

The Treasury took in £50.2bn in taxes in April - £5.5bn higher than the same month last year after the national insurance hike came in.

The Treasury took in £50.2bn in taxes in April – £5.5bn higher than the same month last year after the national insurance hike came in.

Mr Johnson was flanked by chief of civil servants Simon Case (left) and Rishi Sunak (right) as he held the cabinet today

Mr Johnson was flanked by chief of civil servants Simon Case (left) and Rishi Sunak (right) as he held the cabinet today

Inflation has already soared to its highest level in 40 years, hitting 9 percent in April, on the back of eye-watering increases in energy tariffs, and is expected to hit double digits by the end of the year before falling back.

The Office for National Statistics (ONS) said government borrowing, excluding state banks, was £18.6 billion last month – lower than forecast and down £5.6 billion from a year ago.

The figure was still the fourth-highest loan in April since records began and £7.9bn more than in April 2019 before the pandemic hit.

But the data also showed that lending for the fiscal year to the end of March 2022 was cut by £7.2bn to £144.6bn.

While the 2021-22 result is the third-highest financial year for borrowing and above £127.8 billion forecast by the Office for Budget Responsibility (OBR), it may provide some much-needed leeway for the government as she has to deal with growing calls to help households in need of money.

PAYE tax revenue rose from £15bn in April 2020 to £17.8bn this year, while VAT raised an additional £1.6bn. Mandatory social security contributions increased by £1.4 billion.

The figures showed that interest payments on government loans last month were £4.4bn, down from £4.9bn a year earlier.

However, interest payments are expected to rise as a result of the skyrocketing levels of the inflation measure for the retail price index used for government debt payments, with June data showing the full extent of the recent rise in inflation.

Mr Sunak said: ‘While we are doing what we can to help families cope with rising prices, inflation is also pushing up our spending on interest on debt – which is expected to reach £83bn this year.

“We need to take a balanced and responsible approach to supporting people now, while not burdening future generations, and we are on track to reduce public debt by 2024-25.”

The ONS figures include the £3bn cost of the recent council tax cut, which offered £150 to many UK households to help with rising energy bills.

But those costs were “offset by cuts in other spending areas, including grants and transfers to local government.”

Tax intake is now higher than before the pandemic

Tax intake is now higher than before the pandemic

The ONS also estimates that the 1.25 percent increase in national insurance in April will bring in around £18bn this fiscal year.

Public sector debt, excluding public sector banks, stood at £2.35 trillion at the end of April, up from £179.1 billion from a year earlier and representing about 95.7 percent of gross domestic product (GDP). ), according to the US.

Helen Morrissey of investment firm Hargreaves Lansdown said: ‘We continued to see the benefits of high levels of employment, with income tax and national insurance contributions continuing to rise as a result of a 4.9 percent increase in paid employees.

“This is a hugely positive trend, but dark clouds are gathering on the horizon as we expect the impact of the 1.25 percentage point increase in National Insurance to feed into the data over the coming months.

“As the crisis continues to gnaw at the cost of living, this will be an additional cost that many people cannot afford.”

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