6 days ago
Why does the British tax year end on April 5th?
For Britons the end of the tax year looms on April 5th. Why such a seemingly random date?
In the Middle Ages England's tax year—or a nascent version of it—ended on Lady Day, March 25th, a religious festival by when debts had to be settled. The country, like most of Europe, used the Julian calendar. But Julius Caesar's system was flawed, and in 1582 continental Europe, on Pope Gregory XIII's orders, shifted to a more accurate model. Protestant England resisted.
By the mid-18th century England was 11 days behind the continent, creating scope for confusion in trade and diplomacy. To catch up it made a one-off excision of a week and a half from September 1752. People would go to sleep on September 2nd and wake up on the 14th.
At the time, tax was charged not on income but on land and windows. These were annual payments, so to keep the tax period at 365 days people were given 11 extra days to settle their bill. Then, in 1758, the window-tax year was explicitly extended by 11 days, to April 5th. This was the date used when William Pitt the Younger introduced income tax in 1799, and has marked the close of the tax year ever since.
Some may see this as an example of Britain's loveable eccentricity, others as a symbol of the arcane nature of the British tax code itself. The April date puts Britain at odds with countries such as America, France and Germany, all of which harmonise with the calendar year. Indeed, it does not coincide with the British government's own financial year, which begins (don't ask why) on April 1st.
The Chartered Institute of Taxation, a body for tax professionals, says getting in sync with other countries would increase efficiency and reduce friction. Despite its name, the Office of Tax Simplification (OTS), an independent body within the Treasury, pointed in a 2021 report to the administrative effort that would be involved in changing the date, though it conceded that 'a tax year aligned to the calendar year would be the natural, simplest and easiest approach". Don't hold your breath: the OTS was abolished in 2023.
Correction (March 31st 2025): The original version of this article mistakenly attributed the Gregorian calendar to Pope Gregory III, not XIII. Sorry.
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