News has emerged that the long-deferred Autumn 2019 Budget will be on Wednesday 11 March 2020.
Early on 7 January the Treasury confirmed news that emerged overnight that the Budget will be held on Wednesday 11 March.
The March date is something of a surprise as the Conservatives ‘First 100 Days’ press release issued on 4 December said:
“Before 100 days are up, a Conservative majority Government would have also taken the following actions: Delivering a post Brexit Budget in February which will cut taxes for hardworking families…”
Cynics might consider that given the previous administration’s difficulty in meeting deadlines, it is no surprise that February has now become March and that an Autumn Budget (originally due 6 November) will arrive in what meteorologists class as Spring. In practice, the deferral probably makes sense:
The official ten weeks’ notice the Treasury is meant to give the OBR to prepare an Economic and Financial Outlook would have taken us to 21 February, assuming notice was given on 13 December, the day after the election. Throw in Christmas holiday season and you end up in March.
The delay gives the Chancellor and OBR the chance to see and take account of the all-important January borrowing figures, which capture 31 January self assessment payments and last year produced a £14.9bn surplus for the month.
The Chancellor can hope for some better economic data as businesses react to the election of a government with a meaningful majority, if not yet an end to uncertainty surrounding post-Brexit trade relationships. The IHS MARKIT/CIPS PMI Services data released on 6 January suggested some stabilisation during December, even though the Composite PMI index fell marginally. As the IHS MARKIT/CIPS news release notes, “There were signs that service providers have become hopeful that a more stable political backdrop will help to support business conditions over the course of 2020”.
One consequence of the deferral to 11 March of the Budget is that the Finance Bill 2020 will probably not become a Finance Act until summer, in the tradition of former Spring Budgets. Draft clauses were published on 11 July 2019. These covered some important changes due to take effect at the start of 2020/21, including the extension of off-payroll working rules to the private sector and the tightening up of legislation on CGT and private residences. Once more we will be in a situation where it becomes necessary to comply with laws before they formally exist.
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