The British tax year

Tax period

For corporations, the tax year is the same as the fiscal year for which annual financial statements under commercial law are prepared. Since the tax year cannot exceed 12 calendar months, the correspondence with the fiscal year is achieved by declaring for tax return purposes and the short tax year with the first financial statement.

The regular period for a British tax year, which therefore applies to natural persons, partnerships, trusts, etc., among others, begins on 6 April of one year and ends on 5 April of the following year.

Why does the UK tax year start on 6 April of each year?

In summary, this unusual period formation was caused by Britain’s change from the Julian to the Gregorian calendar.

Short review:

The Julian calendar (introduced by Julius Caesar) is 11 minutes and 14 seconds too long compared to the solar year. This difference had brought the Julian calendar 10 days behind the solar calendar towards the end of 1500.

With increasing interest in science and accuracy, a new system was introduced in Europe in 1592, with a leap year in every century. The change to the new system had been ordered by Pope Gregory XIII (hence Gregorian calendar). The British royal house was in permanent opposition to the papacy and did not participate in the change (actually quite topical with regard to the EU discussion). So, for the following 170 years there was a difference of 10 days between the British calendar and the rest of the (then) world. In 1752 one was one more day behind, so 11 days in total.

England and Ireland oriented themselves on 4 Christian holidays (Mary’s Annunciation 25.03., St. John’s Day 24.06., St. Michael’s Day 29.09., Christmas 25.12.; so-called “quarter days”), on which all debts and outstanding debts had to be settled quarterly and rent for land and property had to be paid. The 25.03. was both the beginning of the year and the first day of the British tax year.

In 1752 the British came to the conclusion that an adjustment of the calendar was necessary. They moved New Year to January 1st and dropped 11 days from the existing calendar. 1752 was thus a year in which the 2nd September was immediately followed by the 14th September.

This year there were protests on the streets of Britain: probably not so much because people had been deprived of 11 days of their lives, but rather because their tax liability had not been adjusted accordingly; they were supposed to pay taxes for a full year, when in fact it was only 354 days.

The Treasury (British Finance Ministry) was typically interested that no tax revenue was lost, and no concession was shown to the Papacy, so they decided that the British tax year should continue to be 365 days. So instead of adjusting the tax burden in that year, the start of the following tax year was moved from 25 March to 5 April. In 1800, the Treasury determined that another day would be lost because 1800 was a leap year in the Julian calendar but not in the Gregorian calendar. And so, the start of the fiscal year was consequently postponed to 6 April.

Pragmatic as the British are, this kind of adjustment to leap years was stopped in 1900, but everyone apparently shied away from the effort to adjust the British tax year to a simpler cut-off date in terms of delimitation. One can only assume that this must be connected with the British love of “cultivated eccentricity” …

Addendum: Someone has calculated that by maintaining the adjustment of the tax year by one day from the leap years of the Julian calendar, one would allegedly have caught up with the rest of the world on 1 January 37901!?