The Office for National Statistics (ONS) has published a correction to the Public Sector Finance figures because HMRC made mistakes in calculating VAT income. HMRC's error gives the Chancellor an extra £2.4 billion in VAT cash receipts and lowers UK borrowing by around £1bn in FYE March 2025.
The news was revealed in an ONS blog and confirmed in HMRC's monthly bulletin 'Tax receipts and National Insurance contributions for the UK'.
According to the ONS, the error reflected an omission by HMRC of some payment streams from the data used to estimate VAT receipts. HMRC were more coy about the cause of the mistake, only saying they had found an 'error'.
The revised data will be fully incorporated into the next public sector finance release, due on 21 October 2025. According to the ONS, the impact of the correction is to reduce government borrowing by around £1bn in FYE March 2025 and reduce monthly government borrowing in the current financial year by between £200m and £500m per month.
HMRC said the error in VAT cash receipts affected provisional figures from April 2025 to August 2025, giving an upward revision of VAT cash receipts of £2.4 billion (approximately 3% of year-to-date VAT receipts).
"I would like to thank HMRC for bringing the data error to our attention; this timely and transparent communication was vital for identifying the issue and correcting the record quickly," said James Benford is Director-General for Surveys and Economic and Social Statistics at the Office for National Statistics.
Useful guides on this topic
A beginner's guide to VAT
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External links
ONS Blog: An update and explanation on the public sector finance statistics
HMRC official statistics: HMRC tax receipts and National Insurance contributions for the UK (monthly bulletin)