In the annual Budget Speech, the Chancellor of the Exchequer explains to MPs in the House of Commons the Government’s financial plans, explaining how much will be spent in the coming year, breaking down the expenditure between Government departments and explaining how the costs will be met, mainly through taxation but also by Government borrowing.
On 26 November 2025, Rachel Reeves, the first female Chancellor, announced the Labour Government’s plans for spending for the year commencing April 2026 of £1,416 billion, of which £1,304 billion will come from taxation with the balance to be borrowed.
The Budget speech is now normally delivered in the Autumn, having, for many years been announced in March each year.
Accounting, Finance and Economics
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The speech introduces changes to the UK tax system, some effective immediately and others from the start of the tax year on 6th April. Following the speech, a Finance Bill to give legal power to the tax proposals is introduced to Parliament and once approved, this is added to the tax legislation, in this case as the Finance Act 2026. Many UK taxes are annual and the yearly Finance Act is required to keep these in law, including income tax.
This is one of the UK’s major financial events and the Budget announcements are guarded carefully to avoid sensitive information being released early to the financial markets. This year, details of the Budget were accidentally revealed by the Office for Budget Responsibility shortly before the speech, leading to the resignation of the chair of the organisation. In 1947, Labour's Chancellor, Hugh Dalton, accidentally revealed details of his plans on his way to Parliament to make his Budget speech and resigned the following day.
The speech is surrounded by many peculiar Parliamentary customs and can trace its origin to the 1730s. It usually starts at 12.30 pm on a Wednesday, immediately after Prime Minister's questions. Before the speech, the Chancellor is photographed outside of Number 11 Downing Street, the Chancellor’s official residence, with the traditional red box containing the Budget speech. The Speaker of the House of Commons does not chair the Chancellor’s speech instead, it is overseen by their senior deputy, the Chairman of Ways and Means. The Chancellor, while giving the Budget speech, is the only MP allowed to drink anything but water in the House of Commons. Kenneth Clarke is believed to have enjoyed whisky during his speech in 1997 but all subsequent Chancellors are believed to have chosen a glass of water.
Learning more through BCU’s Accounting and Finance course
Our at undergraduate and postgraduate levels offer modules that directly link to taxation.
Each year a group of final year Accounting and Finance students prepare a summary of the Budget tax changes for circulation to BCU academics on the day of the Budget.
Our taxation modules reflect current tax policy and include activities based on realistic scenarios to help students transition from university to roles within the accountancy profession. Many of our graduates have pursued careers in taxation and obtained membership of the Chartered Institute of Taxation.