Britain’s beleaguered statistics office has revised down its estimates of government borrowing this year by £2bn after officials admitted they had undercounted VAT receipts.

The Office for National Statistics (ONS) said it had been informed by the taxman of an error in data supplied by HMRC that meant cash receipts raised from the sales tax between April and August this year were £2.4bn higher than previously thought.

The ONS also reduced its estimate for borrowing in the previous financial year by a further £1bn.

The admission will provide relief for Rachel Reeves, the Chancellor, who faces a multibillion-pound black hole in the public finances against a backdrop of higher borrowing costs and a series of about-turns on welfare.

However, it deals another blow to the credibility of the ONS, which has been dogged by a series of problems linked to data used by policymakers to make key decisions – including the cost of borrowing.

This has drawn widespread criticism including from Andrew Bailey, the Governor of the Bank of England.

The admission comes weeks ahead of the Chancellor’s crucial second Budget, in which she is battling to restore her wafer-thin headroom of just £9.9bn.

The Office for Budget Responsibility (OBR), the Government’s tax and spending watchdog, also described August’s figures as an anomaly with data for previous months running in line with official forecasts.

The revision means that the Government has borrowed £81.8bn this financial year to plug the gap between tax revenues and public spending. While this is below the £83.8bn initially reported, it remains nearly £10bn higher than the OBR’s projection of £72.4bn in March.

Economists still believe Ms Reeves will have to raise taxes by £30bn in the Budget to balance the books.

The ONS added that while the error in VAT receipts would lower the deficit, revisions would not affect Britain’s overall debt pile of more than £2.7tn.

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