The Budget is a financial statement given by the Government every year. It looks at the UK’s economic situation and explains how the Government intends to raise the money it needs to run the country. Much of this money comes from tax so during the Budget the Government also tells us about any changes to tax.
For more information on tax, duties rates thresholds & limits click tax.
Who is responsible for the Budget?
The Budget is worked out by the Chancellor of the Exchequer, together with the Government department the Treasury.
When is the Budget?
The Budget takes place in the spring, usually in March. There is also a pre-Budget report in the autumn that looks at progress since the previous Budget, gives an update on the economy and announces changes to tax.
Where does it take place?
The Chancellor of the Exchequer makes the Budget statement in the House of Commons. Traditionally the Chancellor carries the Budget to the House of Commons in a red leather briefcase called the Red Box. You usually see photographs in the newspaper of the Chancellor holding up the Red Box before setting off for the House of Commons. There is another tradition that allows the Chancellor to have an alcoholic drink while making the Budget speech but recently the Chancellor has stuck to water.
What happens next?
Straight after the Chancellor has presented the Budget, the leader of the opposition makes a speech responding to it. This can get quite heated because the opposition party often disagrees with the choices that the Government makes about running the country.
Some of the changes to tax start straight after the Budget, for example the Chancellor often raises tax on petrol or cigarettes from midnight following the Budget speech. However, any changes made in the Budget don’t become law until the Finance Bill is passed in August. Often, the Chancellor announces changes that will take place the following year.