Why Does The Tax Year Start In April?
Posted on 10th June 2019 at 16:45
Auxil was blog free the whole of April, Why? Because April is a busy month for any business, with the new tax year coming into effect.
Have you ever wondered why the new financial year starts in April?
You might think logically the new financial year should coincide with the calendar year; some countries it does, but in the UK, we scramble to get our affairs in order by April 5th and the new year starting on the 6th. To understand this, we need to look back a few years…
In the UK, the new year used to start on March 25th, also known as ‘Lady Day ’, to mark the angel Gabriel’s announcement to the virgin Mary that she would become the mother to Jesus Christ. Lady Day was one of the four most important days in the religious calendar.
The move forward to April 6th is a result in changes from the Julian calendar to the Gregorian calendar. Until 1582, Europe has used the Julian calendar established by Julius Caesar. Under the Julian calendar, the year had 11 months of 30 to 31 days, with February being an exception of only have 28 (29 every leap year). This had worked well for centuries, however because it didn’t align with the solar calendar, over time problems developed.
The Julian year was only 11 ½ minutes longer than the solar year, but by the late 1500’s, this had all added up and the Julian calendar was a whole 10 days out. To solve this Pope Gregory XIII instituted a change in 1582, thus the Gregorian calendar was born, The Gregorian calendar reduced the length of the calendar year from 365.25 days to 365.2425, a reduction of 10 minutes 48 seconds per year! While Europe adopted the Gregorian calendar, however, England, with its history of conflict with the Roman Catholic church, did not (nor did Russia), and continued with the Julian calendar.
By 1752, when it was 11 days out of alignment with the rest of Europe, England finally accepted that it would have to make a change. The decision was made to drop 11 days from the month of September to catch up, and so September 2 was followed by September 14 that year. To ensure that there was no loss of tax revenues, however, the Treasury extended the 1752 tax year by adding on the 11 days at the end. Consequently, the beginning of the 1753 tax year was moved to April 5.
In 1800 a further adjustment was made, shifting the start of the tax year forward by one more day to April 6, once again to mitigate for the differences between the Julian and Gregorian calendars. The year 1800 would have been a leap year under the Julian calendar system, but not the Gregorian one, so the Treasury treated 1800 as a leap year for purposes of taxation to get an extra day’s revenue. April 6 has remained the beginning of the tax year ever since.
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