BUDGET 2010 Budget Day has been confirmed as 24 March.   

So at long last we have a Budget Day -Wednesday 24 March. As with the timing of general elections, governments of both hues seem to relish the power to keep a key date under wraps for as long as possible. In this instance the politicians’ procrastination produces some odd results:

• Whatever Mr Darling says, there is not going to be much in the Finance Bill 2010. Whereas ‘normal’ Finance Bills take three to four months to work their way through to Royal Assent, this Budget’s Finance Bill will probably become an Act within a week. There is precious little Parliamentary time left. 
• There has to be at least 17 working days’ notice given of a General Election. If the oft-predicted 6 May turns out to be the election day (it is a local election day in England), then Parliament will have to be prorogued by no later than Monday 12 April. Whether Parliament will have come back from its Easter recess by then is yet another unknown: as of 10 March the dates for the Easter recess had not been announced. 
• According to the experts, there has got to be a Finance Act – which means there has to be a preceding Budget statement. Without an Act, some planned measures would have to disappear. A notable example is the reduction in the anti-forestalling income limit to £130,000. This may have been announced in December’s pre-budget report, but the legislation behind it remains only in draft. 
• A rushed Finance Bill with little scrutiny will be an uncontroversial affair, to avoid delays. This is what happened back in 2005, the last time an election and a Budget collided. The result is that the legislation will probably need subsequent amendment to correct the nodded-through drafting errors. 
• There will be a second Finance Bill after the election (again this happened in 2005). Whatever form the next government takes, this will be the Bill where the unpalatable tax increases start to appear.  In part it is down to politics again: if, as a politician, you are going to do anything the electorate will not like, you do it as far away from the next election as possible. 

 WEALTHFLOW COMMENT

Those of a cynical disposition might think that the Wednesday 24 March has been chosen to minimise the time that action can be taken by taxpayers before the end of the tax year (given the last working day is effectively Thursday 1 April). Anyone for a hike in CGT?

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