Concern is growing over the date of
this year's Budget. Chancellor Gordon Brown has set the date of the
next announcement - April 17.
But experts are suggesting that this
could prove both an administrative nightmare - coming 11 days after
the introduction of the new tax year - and cut three vital weeks off
the parliamentary debate into a subsequent finance bill.
Major tax changes would have to be
reflected in any booklets issued by the Revenue, and employers could
find themselves handing out refunds for any repaid tax.
But it is understood that the Revenue
will be given extra time - until the first pay day after June 17 - to
make any alterations necessary.
website issued the following statement: "Employers and
pension providers will be asked to put into effect any consequent
changes to codes and tax tables on the first pay day after 17 June
2002, backdated to the start of the tax year.
As an Employer this means
Any revised notices of coding will be issued early June. You should
make any P6 PAYE code changes on the first pay day on or after 18 June
If you have been sent new tax tables for 2002-03 (either as paper or
in electronic form as a CD ROM), you should use them on or after 18
From 18 June onwards you should apply any tax codes changed by the
The period when an employer may use a P45 dated in 2001-02 will be
extended to 24 June 2002 from 24 May. (See page 20 of the Employer's
Help Book (E13) which will be sent to you as part of the annual pack
As the Finance Bill needs Royal Assent
by August 5, Parliament will have even less time to debate any
But PwC tax partner John Whiting was
less concerned. He explained: "Changes to personal allowances and
tax rates are effective from 6 April and with a March Budget can be
ready to go then. By having the Budget in April, employers will have
to do a certain amount of adjusting and amending - more work for them,
although we do already have the personal allowance figures from the
pre-Budget report in November which will help.
"Employers will have to watch out
for potential changes to National Insurance contributions and where
the 10%, 22% and 40% income tax rates start and end.
"Business could be irritated by
having to wait another month to know for certain whether measures such
as the long-awaited Intellectual Property reforms and substantial
shareholdings relief will be coming in at 1 April.
"The Treasury could also lose out
on revenues from increases to taxes, such as petrol & diesel
duties, which normally come into effect immediately. And of course, an
April Budget is one month closer to 5 August - the cut off point for
passing the Finance Bill to ensure that income tax goes back on the
statute book. However, I am sure this will not be of concern to most
The later date - Budgets usually occur
in March - is due to Gordon Brown's absence from the Treasury from the
start of this year after the tragic death of his baby daughter
The Chancellor announced in this
year's Pre-Budget Report that a major rethink was needed on how public
services are paid for - hinting that tax increases may be necessary.
Squaring this circle may also explain the delay.
Announcements are expected on a
volume-based research and development (R&D) tax credit for large
companies, plus changes to the corporate debt and forex regimes.
Intellectual property reform, rollover
relief for companies with substantial shareholdings and further
changes to stamp duty could also feature.
AccountingWEB will be running full
coverage of the event on its dedicated Budget