Tax is a key battleground in the upcoming general election, with the Conservatives, Labour and Liberal Democrats all ruling out increasing income tax, VAT and National Insurance (NI) rates.
But cuts in NI have eaten into how much money the government receives at a time when politicians are unwilling to commit to spending more on public services.
The government got £900m less from NI last month than it did in May last year.
But overall, tax receipts went up by £1bn after revenue from income, corporation and value added taxes increased.
Taxes, including income tax, have effectively been rising after a government freeze on thresholds – the amount of money people earn before they start paying tax or before they start paying a higher rate.
Thresholds usually rise in line with inflation, but in 2021 the Conservative government froze most bands in response to Covid.
This has dragged more people into paying higher rates, in a phenomenon known as “fiscal drag”.
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