Having been an Accountant and a member of the Institute of Taxation for over 30 years, I have always wondered why this country remains the only one in the modern world to retain the archaic 6th April as being the beginning of the tax year.
I had dozens of clients who referred to their income "last year" as meaning their income in the previous calendar year rather than in the previous tax year. Explaining that a year runs from 6th April to the following 5th April confused the client even before I started on the intricacies of how tax worked and when it was payable !
I had dozens of clients who referred to their income "last year" as meaning their income in the previous calendar year rather than in the previous tax year. Explaining that a year runs from 6th April to the following 5th April confused the client even before I started on the intricacies of how tax worked and when it was payable !
So why 5th April ?
You have to go back a long way and I won't be going into too much detail as, if you are really interested, you can Google it and find out. Suffice to say that in 1582 Pope Gregory XIII ordered a change from the Julian Calendar, named after Julius Caesar, to the Gregorian Calendar, named after ....... himself !
The Gregorian calendar was based on the time it took the earth to travel around the sun, which was eleven and a half minutes more per annum than a year under the Julian calendar. By the late 1500's this meant the difference in time since the year zero was 10 days. As the Brits were in dispute with the Catholic Pope, we ignored the decree and carried on using the Julian Calendar. It wasn't until 1752 that we thought we should align our New Year's Day, previously Lady Day on 25th March, to the same as was being used in Europe i.e. 1st January.
To do this the Government decided that in 1752, when there were now 11 accumulated lost days compared to the rest of Europe, 2nd September would be followed by 14th September. This was very unpopular with the masses and they allegedly rioted in the streets complaining that they had been robbed of 11 days of their lives. The main focus of their fury was that they were still going to have to pay a full year's tax despite the fact the year was only going to be 354 days long. To pacify the proletariat, but at the same time getting the New Year into line with our European friends, it was decided that when the old tax year ended on 25th March 1752 it would be immediately followed by the beginning of the new tax year on 5th April, thus loosing the 11 days in a hole nobody noticed.
In 1800 a further day of trickery pokery had to be found in order to maintain alignment with Europe, so the start of the new tax year was again moved, this time to 6th April, where it has remained ever since.
You have to go back a long way and I won't be going into too much detail as, if you are really interested, you can Google it and find out. Suffice to say that in 1582 Pope Gregory XIII ordered a change from the Julian Calendar, named after Julius Caesar, to the Gregorian Calendar, named after ....... himself !
The Gregorian calendar was based on the time it took the earth to travel around the sun, which was eleven and a half minutes more per annum than a year under the Julian calendar. By the late 1500's this meant the difference in time since the year zero was 10 days. As the Brits were in dispute with the Catholic Pope, we ignored the decree and carried on using the Julian Calendar. It wasn't until 1752 that we thought we should align our New Year's Day, previously Lady Day on 25th March, to the same as was being used in Europe i.e. 1st January.
To do this the Government decided that in 1752, when there were now 11 accumulated lost days compared to the rest of Europe, 2nd September would be followed by 14th September. This was very unpopular with the masses and they allegedly rioted in the streets complaining that they had been robbed of 11 days of their lives. The main focus of their fury was that they were still going to have to pay a full year's tax despite the fact the year was only going to be 354 days long. To pacify the proletariat, but at the same time getting the New Year into line with our European friends, it was decided that when the old tax year ended on 25th March 1752 it would be immediately followed by the beginning of the new tax year on 5th April, thus loosing the 11 days in a hole nobody noticed.
In 1800 a further day of trickery pokery had to be found in order to maintain alignment with Europe, so the start of the new tax year was again moved, this time to 6th April, where it has remained ever since.
Now, why on earth some clever Chancellor couldn't have since come up with some fair formula for changing the tax year to 1st January is bizarre. When self assessment was introduced, they changed the way in which the self employed were taxed from the old previous year basis to a current year basis, and in 1996/97 they effectively taxed two tax years of profits in the same tax year - nobody rioted in the street - surely this would have been an ideal time to move the beginning of the new tax year from 5th April to 1st January ?
I live in hope that the Government's aim of tax simplification can include a change to 1st January so that when us Accountants talk about a Happy New Year our clients don't look at us and wonder what drugs we are on !
I live in hope that the Government's aim of tax simplification can include a change to 1st January so that when us Accountants talk about a Happy New Year our clients don't look at us and wonder what drugs we are on !