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With the Budget announcement just around the corner, we have gatherered the most asked questions and answer them below.
Jon Hickman - Corporate Tax Partner
Jon has many years of experience dealing with both OMB’s and large international business.
What is the Budget?
Financial statement that is made to the House of Commons by the Chancellor of the Exchequer outlining the state of the economy and the Government’s proposed changes.
When is the Budget?
The Budget this year will take place on Wednesday 3 March 2021. A Budget was expected to take place in Autumn 2020, but due to the COVID-19 pandemic it was deferred. The last Budget was on 11 March 2020.
What time is it expected to start?
It has not yet been announced, but in previous years the Budget was at approximately 12:30pm, straight after the Prime Minister’s questions.
How long is the speech?
The speech usually lasts about an hour.
The longest ever speech was by William Ewart Gladstone in 1853 which lasted 4 hours and 45 minutes. The shortest speech was given by Benjamin Disraeli in 1867 and lasted 45 minutes.
Who does the Budget speech?
Chancellor of the Exchequer, Rishi Sunak. This will be his second Budget speech to Parliament, the first being in 2020 where he stepped into the role only a few weeks before he made the speech.
Where does the Budget speech take place?
On the floor of the House of Commons.
What is likely to come up this year?
Due to the increased Government borrowing and people being supported by the furlough scheme and other financial emergency procedures, it is thought that there will be an increase in tax rates in order to pay back this borrowing as a result of the COVID-19 pandemic. Many speculate that he will increase the rates of capital gains tax which will affect shareholders selling their business, and business reorganisations.
Read our Budget predictions.
Why do they have the red box?
All ministers have a red box for briefing papers. A red box has been used to carry the Chancellor’s speech from Downing Street to the House of Commons for over one hundred years, started by William Gladstone in 1860. Holding the red box up to the press in Downing Street is the classic image of Budget day in the UK. Budget comes from a French word ‘bougette’ meaning little bag.
What is the Financial Bill and when is it?
A bill that sets out changes to the UK’s main tax laws which is presented to Parliament each year to bring them into law. The government published draft legalisation for the Finance Bill 2021 for technical consultation, and the final contents of Finance Bill will be outlined at Budget 2021. There is then a chance for MPs and the House of Lords to scrutinise and amend the bill before it is enacted – usually in the summer.
What is the Autumn or Economic Statement?
Chancellor of the Exchequer provides an update of the government’s plans for the economy, based on the updated economic projections provided by the Office for Budget Responsibility (OBR). The date for this can move around depending on the economic circumstances but there is usually one economic statement and one Budget a year. It is also known as the ‘mini-budget’ as the Chancellor will sometimes announce specific tax proposals and consultations at the same time.
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