Every year the Chancellor of the Exchequer makes a major speech to the House of Commons on the state of the national finances and the Government's proposals for changes to taxation. This statement is known as the Budget.
When is the Budget?
The Budget usually takes place in March or April. There has to be a Budget every year because some taxes, such as income tax and corporation tax, are annual taxes (not permanent), so they must be renewed each year.
In election years, after a change of Government, a Budget will usually be introduced by the incoming Chancellor of the Exchequer, whether or not the outgoing Chancellor has already delivered one.
What's in the Budget?
The Budget speech usually includes:
a review of how the UK economy is performing
forecasts of how the UK economy will perform in the future
details of any changes to taxation.
The Chancellor's statement is followed by several days' debate.
Tax measures announced in the Budget, known as the Budget Resolutions, can be approved by the House of Commons to come into effect in law immediately. But the decisions to agree the resolutions themselves, are taken at the end of the debate on the Budget.
The Finance Bill is the Bill presented to Parliament each year which enacts the Chancellor of the Exchequer's Budget proposals for taxation.
Once the House of Commons has agreed the Budget Resolutions, the Bill starts its passage through Parliament in the same way as any other Bill.
The House of Lords has a very limited role in respect of Finance Bills. Many Finance Bills are classed as Money Bills, which the Lords may not reject and can only delay for a month.
Since 1997, the Chancellor of the Exchequer has presented an annual pre-Budget report. This usually takes place in November/December. The pre-Budget report speech to the House of Commons usually includes:
a report of progress since the previous Budget
an update on the state of the UK economy
details of any proposed changes to taxation.