Public sector receipts are forecast by the government and the Office for Budget Responsibility.
The government has systematically made an error in determining the VAT receipts, providing a welcome boost to the economy.
VAT deductions are less due to the public spending cuts implemented in recent years. As a result, VAT deductions were overestimated and net VAT receipts were underestimated. This error has built up as the fiscal consolidation has continued.
The resulting correction has boosted VAT receipts by around £0.4 billion in 2015-16, and will rise to £3.3 billion in 2020-21.