Bumper VAT receipts helped government borrowing to fall to its lowest level in August since 2007, according to official figures.
The deficit narrowed to £5.7bn last month, compared with £7bn a year earlier, the Office for National Statistics (ONS) said.
VAT receipts rose 5.6% from last year to £11.6bn, a record for August.
For the financial year to date, the government has borrowed £28.3bn, down £0.2bn from the same point last year.
The ONS said public sector net debt – excluding public sector banks – stood at £1.77 trillion at the end of August, equivalent to 88% of gross domestic product.
The deficit for August was lower than analysts had forecast and follows a £0.2bn surplus in July, which was the first such surplus for that month since 2002.