Lower income tax and corporation tax receipts brought down the difference between income and spending for last month, according to figures from the Office for National Statistics.
There was a £4.7bn surplus in January, which was around half of the amount analysts had been expecting and less than the £6bn surplus recorded a year ago.
January is one of the most lucrative months for the Treasury, because it’s when the government receives money from tax. In most other months, the government has to borrow money to cover its expenses.
However, government tax receipts were £62.1bn in January, down 5.7% from the £65.8bn collected the same month a year before.
For the whole of the financial year, borrowing was £90.7bn, £4bn lower than at the same point a year earlier. Government debt now totals at £1.24tn, equivalent to 75% of the UK's total GDP.
The figures come as George Osborne prepares his annual budget. ‘The deficit has fallen by a third. But as today’s figures show, the job is not done and the biggest risk to the recovery would be abandoning the plan that's boosting economic security for Britain’s hardworking people,’ the Treasury said.