Budget 2018: A Monday unlike any other

The Chancellor, Philip Hammond, has announced that the 2018 Budget will be held on Monday 29th October.

That’s right, a Monday. Typically, Budgets have always been delivered on Wednesday, a tradition that has survived since 1962 and the various hops around the calendar from March to February to autumn. But we live in interesting times, so a Monday it is.

We had considered the prospect of an earlier Budget than last year, of course. Hammond gave notice to the Office for Budget Responsibility (OBR) on 11 September, and they are normally given ten weeks’ to prepare. That would have put the Budget on, or after, Wednesday 22 November. But, under exceptional circumstances, the Chancellor can give the OBR less time.

These, apparently, are exceptional circumstances.

What about Brexit?

As has already been picked up by the newspapers, this date also falls after the next European Council meeting (18 October) and before the possible meeting where the European Council will finalise the terms of Brexit, probably some time in November.

So whilst we are all adjusting our plans to the early date, spare a thought for the OBR who are trying to forecast in the middle of all that.

Here, of course, is the rub. Even the most assiduous project planners, mice or men, are wary of saying what will happen next March. And who can blame them? Whilst we can establish the key likelihoods – hard/Canada, soft/Norway, hard/no deal or Labour government/no-one quite knows… – we can’t say which will happen. Or, indeed, exactly how it will happen.

So, there is every chance that this Budget will be followed by another one early next year, once we’ve picked which flavour Brexit we’re having.

Fortunately, for the government at least, they have given themselves some wriggle room. A 2017 policy paper on the Budget timetable says:

Leaving the European Union will inevitably involve changes to tax legislation. The nature of the legislation needed will depend upon the terms of exit. To maximise certainty for taxpayers, the government expects to make announcements on EU tax legislation at the point that progress in discussions allows it to do so. These are likely to merit exceptional treatment within the consultation timetable. The government will aim to be as open and transparent as possible where such announcements are made outside of the normal Budget process.

This would allow for adjustments outside the usual timetable, for instance to VAT or tariffs. So Hammond may also be preparing contingency plans, which could drop outside the usual Budget cycle.

And those OTS reviews?

As part of his Spring Statement, Mr Hammond commissioned the Office of Tax Simplification to conduct reviews of inheritance tax and the taxation of savings income.

It seems likely that Mr Hammond will want to see the results of those reviews ahead of his statement so we may see publications from the OTS before the date.

So, if nothing else, hopefully October will bring an end to speculation about what will happen to the ever-unpopular inheritance tax, and its poorly understood nil rate bands.

On the day

As always, we will be here on the day, preparing our Budget summaries. From the moment Hammond stands up, the Taxbriefs offices will turn into a hive of activity, editing, late-night pizzas, countless cups of tea and, eventually, the euphoria that comes with delivering the final files. Watch this space…

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