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What is the Budget?

The Budget is the Government’s plan for how it’s going to raise its money for the year and what it’s going to spend it on.

It is worked on by a government department called the Treasury, which is led by the Chancellor of the Exchequer.

One of the ways the Government raises its money through taxation. There are three different types of taxes:

Income tax: Everyone in the country who earns money has to pay some of it to the government.

VAT: When you buy things, a proportion of that money goes to the government.

Duties: Extra charges are added to certain things like cigarettes, alcohol and petrol.

The Budget sets out how much money people will pay in income tax, VAT and duties.

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