The Chancellor’s comments during the Autumn Statement about it being his first and last one have caused some confusion. Let us explain what is happening…
Maybe to announce his Chancellorship with a fanfare, or maybe because it might just make sense, the new Chancellor decided to do away with the Autumn Statement and just have one annual Budget (except in 2017 when there will be two!). Why?
There is some logic to this. The Autumn Statement was originally meant to be a review of the financial and economic state of the nation, a scene-setting if you like. But in recent years it has become more like a second Budget with many tax changes announced. And with a new tax year commencing on 6 April each year, a spring Budget doesn’t really fit with announcing new tax rates, allowances etc, so these also became part of the Autumn Statement. It also meant that in most years we had two Finance Bills, and in some years (eg election year) there were three.
The Chancellor’s new system will be to have one annual Budget, sometime in the autumn (late October/early November) when the tax rates and allowances for the next tax year are announced, changes to tax law are announced, and consultations on changes are instigated. These will then be legislated for in a single annual Finance Bill which will probably receive Royal Assent before the start of the next tax year. BUT for 2017 only, there will also be a Budget in March as the Chancellor clearly needed to transition from the old system to the new system.
Easy, isn’t it?
In subsequent posts we will speculate on what might be in the March Budget and what we would like to see but don’t necessarily expect to see.