Infographic: The UK Budget in numbers
Understanding the facts and figures around the Budget can help to give a sense of perspective, on what has become an annual piece of political theatre.
This Wednesday all eyes will be on the Chancellor of the Exchequer, George Osborne, as he delivers his Budget speech in the House of Commons.
Budget-setting is an important task for many managers, but most do not get the opportunity to present their figures with the flourish that is now expected of the Chancellor.
Harold Macmillan, a previous incumbent of that post, once said: “I have often though of Budget day as rather like a school speech day – a bit of a bore, but there it is. The parents and the old boys like it.”
Download: Budget Infographic
Chancellors like to be able to announce good news on the economy, or at least bad news with a good spin; and, even though many of the key measures will have been intimated already, they like to spring the odd surprise.
It’s unlikely, however, that George Osborne will surprise us with a record-breaking short speech (45 minutes) or epic marathon (four hours and 45 minutes). Those records were set in the Victorian era by Disraeli and Gladstone, respectively.
We’ve crunched the numbers on Westminster’s tax raising and spending to give an idea of the scale of the task at hand. The UK Government’s spending estimate for the fiscal year 2015/16 stands at nearly £760bn. Spending is dominated by four massive areas: pensions, health, welfare and education, all of which have strong advocates in Parliament and among the electorate.
As to how the funds are raised, the debate in Parliament and the media often bears little connection to the relative importance of the Treasury’s various sources of revenue. Measures like taking a penny off a pint of beer can grab headlines, but make very little difference compared to the big three sources of revenue: income tax (25.3%), national insurance contributions (17%) and VAT (17.1%).
The debate on who pays what has tended to focus on corporation tax (accounting for 6.2% of revenue, within an overall 11% paid by business) rather than on income taxes paid by individual taxpayers.
Still, the fascination with Budget day continues. On Wednesday, tax professionals and those who follow the knockabout world of politics will be avidly following what the Chancellor has to say. The ICAS tax team will also be analysing the 2016 Budget and you will, course, be able to keep up with their comment and analysis right here o CA Today.