Nimesh Shah, partner at Blick Rothenberg, said HMRC figures show a £16.7bn tax receipts increase, half of which is down to SDLT (£2.7bn) and VAT (£5.7bn). The other notable contributor is National Insurance (NI) with a take of £2.7bn, which Shah said was due partly to more people in employment and also in part to increased anti-avoidance measures such as those preventing businesses using UK and offshore employment intermediaries to avoid NI payments.

The increase in VAT is due to a number of factors including additional spending in the housing sector, which is further supported by the increase in the number of property transactions over the last 12 months. HMRC monthly data shows that SDLT payments in June 2014 totalled £898m, compared to £560m in June 2013.

‘Total HMRC tax receipts for the 12 months to 30 June 2014 are up 3.5% over the previous year (July 2012-June 2013). This represents a two-fold increase compared to the 12 months prior, and is a result of a series of factors including an improvement in economic growth and several HMRC targeted anti-avoidance measures,’ added Shah.
 
However, in its latest analysis the Office for Budget Responsibility (OBR) described the growth in central government receipts over the first three months of 2014-15 as ‘weak’, although it agreed that the strongest growth was in VAT (up by 4.3% on a year earlier) and SDLT, which was up by 39.3%.

John Bulford, economic advisor to the EY ITEM Club, described the improvement in revenues as ‘disappointing,’ with part of the reason being ‘the positive effects of the Swiss capital tax and high earners deferring income from the previous tax year to take advantage of the reduction in the top rate of income tax are beginning to fade’.

‘The slowdown in growth in VAT receipts is perhaps the biggest let down, particularly given the apparent strength of the consumer. VAT receipts were up just 4.3% to the same three months a year ago, the worst performance for almost a year,’ Bulford said.  

‘With nine months of the fiscal year to go, we need borrowing to fall by £10.3bn relative to 2013-14 if the government is to achieve the OBR’s full year 2014-15 forecast of £95.5bn. This would mean an improvement of £1.1bn per month.

'Admittedly recent history suggests that there may be some help from data revisions, which tend to improve the picture over time. But even allowing for that, the target is looking increasingly challenging,’ Bulford cautioned.