How Budget day announcements reach your payslip, your shopping and your benefits
Some changes announced by the Chancellor take effect that evening, others not until the following April. A guide to how the Budget works and when households feel it.
The Budget is the biggest set-piece event in the government's financial year. The Chancellor of the Exchequer stands up in the House of Commons, sets out the government's plans for tax and spending, and the details are published as soon as the speech ends. For households, the important question is not what is announced but when it starts to apply.
What happens on the day
Before leaving 11 Downing Street, the Chancellor traditionally poses outside with a red despatch box. The speech in the Commons usually lasts around an hour. As soon as it finishes, the Treasury publishes the full Budget documents, which contain far more detail than the speech, including changes that are never mentioned out loud.
On the same day, the Office for Budget Responsibility publishes its own forecasts for the economy and the public finances. The OBR is an independent body, and its figures are the ones the government's plans are measured against.
The Budget is normally held in the autumn, with a shorter update on the forecasts in the spring.
From announcement to law
Most tax changes need an Act of Parliament. After the speech, MPs debate and vote on a set of Budget resolutions, some of which give certain changes temporary legal effect straight away. The detailed changes are then put into a Finance Bill, which goes through Parliament over the following weeks and months before becoming the Finance Act.
Changes that can start almost at once. Some measures take effect very quickly, sometimes from 6pm on Budget day or within days. Changes to duties on products, such as fuel, alcohol and tobacco, have often been brought in this way, so that people cannot stock up at the old price.
Changes that wait until April
Most changes to income tax, National Insurance and allowances start at the beginning of the next tax year, which runs from 6 April. Your employer's payroll system and HMRC deal with the change, and you will usually see it in your first payslip after that date. If your personal circumstances mean your tax code changes, HMRC will send you a notice.
Benefits and pensions
Most working-age benefits and the state pension are uprated each April. Many benefits normally rise in line with inflation as measured by the Consumer Prices Index in the previous September. The state pension rises under the "triple lock", by whichever is highest of earnings growth, CPI inflation or 2.5%. The increases are confirmed in the autumn and paid from April.
Finding out what it means for you. The headline announcements are only part of the story. After the Budget, GOV.UK publishes plain-English summaries of the main measures, and HMRC updates its guidance on rates and allowances. Money charities and independent sites also publish calculators showing how changes affect different households.
If a change matters to you, look for three things in the official documents: what is changing, from what date, and who it applies to. Those answers decide whether you will notice it next week or next spring.
Why the Budget is kept quiet beforehand. Ministers are expected to announce Budget measures to Parliament first. That is why government departments go quiet in the weeks beforehand, and why so much of the coverage before the day is speculation. The official documents published after the speech are the only reliable guide to what has actually been decided.
