Please note that this website has a UK government accesskeys system.
The Budget is the government's annual statement of income and spending and a review of tax levels. It also includes the government's future financial strategy and economic forecast. The Chancellor of the Exchequer delivers the Budget speech in the House of Commons.
The Chancellor's speech usually has two parts:
It’s usually in this second part that tax changes that affect people's income and spending are announced. These might be, for example, any changes in income tax or VAT (Value Added Tax).
After the Chancellor's Budget speech, the Leader of the Opposition replies, rather than the Shadow Chancellor.
The length of the Budget speech can vary. The longest continuous Budget speech was by William Gladstone on 18 April 1853, lasting 4 hours and 45 minutes. Benjamin Disraeli's 1867 Budget speech lasted only 45 minutes, about the same time as Gordon Brown's in 2005.
It's traditional for the Chancellor of the Exchequer to make a Budget day broadcast during the evening of Budget day. This gives the public a chance to hear about the intentions and ideas behind the Budget in more detail. The opposition parties respond in their own broadcasts during Budget week.
There are then usually four or five days of debate on the 'Budget resolutions'. These are the basic parts of the Budget that renew annual taxes, such as income tax or corporation tax. The debate covers different policy areas such as health, education and defence.
Budget changes can start before the annual Finance Bill is passed
Tax law means that changes announced in the Budget can take effect before the Finance Bill is passed.
The Budget resolutions are debated in Parliament after the Chancellor has finished the Budget speech. They are voted on in the House of Commons at the end of the Budget debate and if passed, they can take effect straight away. They authorise the setting of certain taxes or changes in their rates under the Provisional Collection of Taxes Act 1968.
Budget rules mean that the changes in excise duties, for example taxes on alcohol and petrol, often take effect from 6.00 pm on Budget day.
Later in the year, tax changes announced in the Budget are made part of law when the annual Finance Bill is passed in Parliament. This is also when annual taxes are renewed.
The Finance Bill is normally published in early January, and considered by Parliament in the spring, with Royal Assent given by the start of May.
Every autumn since 1997 a Pre-Budget Report (PBR) has been presented by the Chancellor to the House of Commons.
Chancellor Gordon Brown launched the first PBR in November 1997. He wanted to create a shared "national economic purpose between government, business and individuals" by giving a progress report on the economy and public finances.
The PBR outlines what has been achieved so far and sets out the direction of government policy in the run up to the spring Budget.
