Why does the UK tax year start in April?
Why not simplify things and match the tax year to the calendar year?
Challenging the status quo and examining the world around us is crucial for progress and development. Considering the significant time and money people dedicate to taxation, it might be relevant, though not necessarily at the forefront of your mind, to question why 6 April is chosen as the start of the new tax year. It would certainly be more straightforward to begin the financial year on 1 January!
However, like so much of the UK tax system, it is far from simple and rooted in complexity. As we delve into this blog post, you'll discover there are sound historical reasons and logic behind this choice, involving calendar accuracy, religion, agriculture, and a period when the government was accused of "stealing" 11 days!
Read on to find out more.
The UK tax year, also referred to as the fiscal year, or financial year, commences on 6 April.
Correspondingly, the fiscal year ends on 5 April.
This is the timeframe (6 April to 5 April the following year) in which individuals and businesses have to report their income and then calculate the tax they owe. The deadline for paying your tax bill is after the end of the tax year. This then provides you with time to both plan and budget for settling your liability through payment on account.
Up until 1752, the new year in England didn't begin in the middle of Winter on the first day of January. The calendar year was aligned to the seasons meaning it began on the Spring Equinox, also known as lady day, as part of the then Julian calendar.
Lady day commemorates the archangel Gabriel's announcement to Mary that she would give birth to Christ. The Spring Equinox is 25 March when the length of daylight hours and night hours are the same.
The Equinox was one of the four quarter days when rents were paid, accounts were due, and school terms commenced. It fell between ploughing and harvesting for farmers meaning this was the date for starting long term contacts between farmers and landowners. For this very reason it was also the beginning of the new year and, the tax year.
In 1582, Pope Gregory XIII introduced the Gregorian calendar in place of the Julian calendar. This used a solar dating system that corrected an issue with the Julian calendar. The old calendar calculated the year at 365 and a quarter days with a leap day every 4 years, resulting in an inaccuracy in the measurement.
This error meant the calendar dates of the seasons regressed by one day per century. The solar year on the other hand used an annual timeframe of 365 days, 5 hours, 48 minutes, and 45.25 seconds. This alternative method addressed the imbalance as no century year can be a leap year unless it is divisible by 400, and later 4,000. Within a year, European countries had adopted it, as did Scotland in 1600, which at that time was independent of England.
Protestant England refused what was considered at the time to be a Catholic concept. The result, was this led to the complexity of people having to use both calendars when trading with Scotland and the continent.
By 1751, Parliament had recognised these issues and the need to harmonise with Scotland (which had become part of the United Kingdom in 1707), and the rest of Europe. The Calendar Act followed switching the UK from the Julian to the Gregorian calendar. Consequently, the new year now began on 1 January.
The switch meant 1751 became a short year, running from March to December. Furthermore 11 days had to be corrected to align the calendars. Wednesday 2 September was to be followed by Thursday 14 September 1752 meaning the 11 days in between were lost.
However, taxes and rents were still due on the equinox and were expected to be paid in full! People had lost 11 days worth of income and understandably, felt hard done by this. The solution therefore was to delay the start of the tax year by 11 days to 6 April.
Incredibly, over 270 years later, the tax year dates still stand to this day!
The content of this post was created on 27/02/2022 and updated on 07/03/2025.
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