Seven things to know about the new Budget timetable
15 December 2016
Autumn Statement 2016 announced that the government would move towards having one main annual fiscal event.
After the spring 2017 Budget, Budgets will be delivered in the autumn with the first one taking place in autumn 2017. The Office for Budget Responsibility will produce a spring forecast from spring 2018 and the government will make a Spring Statement responding to that forecast.
Making the transition to the new timetable will require adjustments to the normal tax policy making process due to the shorter interval between the 2 Budgets. Arrangements will be decided individually for different policies and set out to stakeholders by HM Revenue and Customs (HMRC). In the normal way, these will where possible provide for consultation on policy proposals and on draft legislation.
1. The UK is the only major advanced economy to make major changes to the tax system twice a year
Businesses, economy and tax experts like the International Monetary Fund, Institute for Government, the CBI, Chartered Institute of Taxation and the IFS have all been calling for this change. It will mean businesses and people face less frequent changes to the tax system, helping to promote certainty and stability.
2. Spring Budget 2017 will be the final Budget held during springtime
The move to a single fiscal event will be made after the spring Budget in 2017. There will be a second Budget before the end of 2017 to switch to the new timetable, which will then be followed in future years.
The Office for Budget Responsibility (OBR) is required by law to produce two forecasts a year. One of these will remain at Budget. The other will fall in the spring and the government will respond to it with a Spring Statement.
3. Finance Bill will follow the Budget, as it does now
We expect a Finance Bill in spring/summer 2017 following the spring Budget.
From winter 2017, Finance Bills will be introduced following the Budget. The aim will be to reach Royal Assent in the spring, before the start of the following tax year. This change in timetable will help Parliament to scrutinise tax changes before the tax year where most take effect.
4. Tax policy consultation will continue and be strengthened
The government remains committed to consulting on policy as set out in ‘The new approach to tax policy making’ in 2010. Most measures proposed at a Budget will be subject to policy consultation in the spring and publication of draft legislation in the summer, before being legislated in the Finance Bill after the following Budget. To build on this and allow for an earlier stage of involvement on key strategic challenges, the Chancellor has said that he may launch consultations on how to address these longer-term issues at the Spring Statement.
5. From 2018 ‘Legislation day’ will move to the summer
Since 2011, most tax policy consultation summaries and draft Finance Bill legislation have been published on ‘Legislation day’, following the Autumn Statement. In 2016 this will be on 5 December. From 2018, under the new timetable, this will move to the summer. As now, the date will continue to be announced by written ministerial statement.
6. An Autumn Budget means tax changes will be announced well in advance of the start of the tax year
The single fiscal event and new timetable to bring forward tax changes so they are legislated for before the start of the tax year will be beneficial to tax stakeholders. Making the transition to the new timetable will require adjustments to the normal tax policy making process due to the shorter interval between the two Budgets. Arrangements will be decided individually for different policies and set out to stakeholders by HMRC. In the normal way, these will where possible provide for consultation on policy proposals and on draft legislation.
7. 2018 will see the first Spring Statement
The Spring Statement will respond to the updated OBR forecast for the economy and the public finances. The Chancellor has said that the government will consider longer-term fiscal challenges and start consultations on how they can be addressed. The government will retain the option to make changes to fiscal policy at the Spring Statement if the economic circumstances require it.