We all love a Budget and there are three that are of interest to the UK payroll professional: The UK Budget, the Scottish Budget and the Welsh Budget.

The UK Budget

This will be delivered by the Chancellor of the Exchequer from the House of Commons.  At the time of writing, there is no date for this, however, there have been rumours of an early Budget in September 2019.

Until there is a UK Budget, the other ones in the devolved administrations cannot really take place with any certainty of the funding that they will get.  That is especially so this year given that the 2019 Budget will be accompanied by a Comprehensive Spending Review.

The Scottish Budget

With so many things now devolved to the Scottish Government, this is one to watch for, not least for the announcement of the rates and bands of Scottish Income Tax (SIT).  However, this cannot really take place before the UK Budget without Scotland having at least an indication of the funding that they will receive from the UK Government.  There has been no announcement of a date so far.

However, what is interesting about this year’s Scottish Budget is the fact that SRIT (Scottish Rate of Income Tax in 2017/18) receipts have been nearly £1 billion less than expected.  As a result of the ‘risk-sharing mechanism’ that Scotland has with the UK Government, funding for the Scottish Government in 2020/21 will result in a £204 million reduction.

In short, Scotland’s capacity for spending the money it receives (either from Income Tax or the Block Grant) will be diminished in 2020/21. Therefore, how Scotland plans to tackle this will make this year’s Budget all the more interesting.

The Welsh Budget

Wales have made an announcement about the timing of their Budget.  This Budget is important for the announcement of the three Welsh Rates of Income Tax for 2020/21.  Remember, these are based upon the rates of tax that are in place for rUK Taxpayers but Wales has pledged not to increase tax for Welsh Taxpayers until the next Assembly is formed (May 2021).

The Minister for Finance and Trefnydd has indicated that:

  • The outline and detailed draft Budgets will be published together on 10 December 2019 and
  • The final Budget will be published on 3 March 2020

However she has indicated that the politics in Westminster, the intention for a Comprehensive Spending Review and the date of the UK Budget have been ‘challenging’ in terms of setting a date, therefore, the dates above are what she is ‘planning’. There is every possibility that the actual date of the Welsh Budget could change!

From the above, I hope that you can see that devolution impacts the payroll profession yet so much of the devolution settlements are still reliant on what happens in Westminster, and when.

Which is why Income Tax is not a devolved tax but is a shared tax.


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