Factoid - Why the new tax year starts on 6 April
Discussion
Ever wondered why the tax year uses such odd dates in UK, with the fiscal year ending on 5 April? Why not 31 March, to keep things tidy? Or better still, 31 December?
Back in the day people weren't able to travel much in the wet and muddy winter. By spring, the King's tax collectors could get out and about on their horses, shaking down barons and peasants for some hard cash. But why 5 April?
Traditionally UK "Quarter Days" when rents etc would be payable were around the equinoxes and solstices - so 25 March, 24 June, 29 October and 25 December. In Britain 25 March also used to be New Year's Day so that was when the new tax year started.
In those times people weren't as clever about leap-years and not all countries were using the same calendar. The standard Gregorian Calendar used in the rest of Europe was eventually introduced in the British Empire in 1752. It corrects better for leap-years.
By then the British calendar had ticked 11 days out of sync' with the rest of Europe. This would have gone on increasing as the decades passed and the British knew it was time for a change. On the old British Calendar the tax year began on March 25 and in order to ensure against losing tax revenue it was decided by the Treasury that the tax year, which started on March 25 1752, would be the usual length of 365 days and therefore end on April 4, the following tax year beginning on April 5.
Time passed smoothly and accurately until 1800. Unfortunately, 1800 was not a leap year in the new Gregorian calendar but would have been in the old British (Julian) system. So the Treasury moved the start of the UK tax year from April 5 to April 6 and it has remained there ever since...
Separately from all of the above it's always stuck me as weird that most months have either 30 or 31 days, but February is significantly shorter. Wouldn't it be easier to chop the 31st off some months and add those days to February so that all months are either 30 or 31 days?
Back in the day people weren't able to travel much in the wet and muddy winter. By spring, the King's tax collectors could get out and about on their horses, shaking down barons and peasants for some hard cash. But why 5 April?
Traditionally UK "Quarter Days" when rents etc would be payable were around the equinoxes and solstices - so 25 March, 24 June, 29 October and 25 December. In Britain 25 March also used to be New Year's Day so that was when the new tax year started.
In those times people weren't as clever about leap-years and not all countries were using the same calendar. The standard Gregorian Calendar used in the rest of Europe was eventually introduced in the British Empire in 1752. It corrects better for leap-years.
By then the British calendar had ticked 11 days out of sync' with the rest of Europe. This would have gone on increasing as the decades passed and the British knew it was time for a change. On the old British Calendar the tax year began on March 25 and in order to ensure against losing tax revenue it was decided by the Treasury that the tax year, which started on March 25 1752, would be the usual length of 365 days and therefore end on April 4, the following tax year beginning on April 5.
Time passed smoothly and accurately until 1800. Unfortunately, 1800 was not a leap year in the new Gregorian calendar but would have been in the old British (Julian) system. So the Treasury moved the start of the UK tax year from April 5 to April 6 and it has remained there ever since...
Separately from all of the above it's always stuck me as weird that most months have either 30 or 31 days, but February is significantly shorter. Wouldn't it be easier to chop the 31st off some months and add those days to February so that all months are either 30 or 31 days?
HMRC wants the tax year to be more "sensible". They issued a consultation document a while ago asking for views on alternative year ends. The two most popular suggestions were either 31 Decermber or 31 March. It's all gone a bit quiet now so I think it is qan idea they have put on the back burner for a bit.
My choice would be 31 March as it would involve the least amount of disruption to the current system.
Other countries have made this change. In 1987, Ireland switched from the 5 April tax year end it had inherited from its time as part of the UK to a 31 December year end date.
The USA uses 31 December too.
My choice would be 31 March as it would involve the least amount of disruption to the current system.
Other countries have made this change. In 1987, Ireland switched from the 5 April tax year end it had inherited from its time as part of the UK to a 31 December year end date.
The USA uses 31 December too.
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