The tax revenues for January show just how big an attack the government has launched on jobs, savers and the private sector. Tax is too high

By johnredwood on February 21, 2026

Normally I would welcome a better government surplus in January, the one month each year when tax exceeds spending by the government. The Treasury is claiming credit and implying it is doing well on spending. If only. The figures show the surplus is all down to a massive tax hit on the UK economy. Total tax revenue this January was 13.8% higher than January last year, or 10.8% up in real terms after allowing for 3% inflation. VAT receipts were flat because people are so squeezed by the taxes they are not buying so many discretionary items that attract VAT. The reason I think these numbers should ring alarm bells, not celebratory peals of joy, is they mean less growth, fewer jobs, and a smaller economy next year to try to pay for the ever expanding public sector. Tax on jobs was well up. The results are there to see in rising unemployment and mass unemployment for young people, priced out of the market by high National Insurance and Business rates. Tax on self assessment incomes is well up. Some of that is making more people pay not just last year's tax but also 50% of their estimate of this year's on top, so the figures contain a one off of more than one year of tax. Some of it is taxing hard work, extra jobs and savings incomes, which is driving more people to end their small businesses, to emigrate to lower tax countries, or to give up some of their activities. Capital Gains tax is well up. Some of that will be the stream of wealthier people rushing to the exit cashing in their expensive homes and selling stakes in their businesses, so they will be one off profits for the Treasury. Tax on incomes is well up as more and more people get dragged into higher tax bands and need to pay a much higher rate on their pay award. There is no sign of spending slowing down. The government is rushing to give more away, as with the £35 bn over the longer term to Mauritius for Chagos, the £20 bn a year of unacceptable Bank of England losses on bad bond trading, the continuing surge in sicknotes for life adding greatly to the long term benefits bill, and the ballooning subsidies for renewable energy and the forced electric revolution. The high tax strategy has delivered a rare good month for the public finances at the cost of more damage to the economy in the months ahead. Next comes more regular tax payments from small businesses, hitting their cashflow. With then higher business rates and lethal National Insurance it means there will be more small businesses closing down and fewer new jobs from this vital sector. The government is still creating and pushing its doomloop. It hates the private sector and thinks it can tax it and tax it again without people leaving and businesses closing. They need to listen to those of us who have seen this from previous Labour governments and do not want them to go the same road to misery and defeat.