The UK government’s financial year runs from 1st April to 31st March and taxes such as corporation tax are accounted for within that financial year. 

Have you ever wondered why the government decided that the tax year for personal taxes should run from 6th April to 5th April?  In Ireland, for example, the tax year runs from 1st January to 31st December which seems much more sensible in many ways.

The origin of this rather quaint a tax year dates back to the Middle Ages. At this time the British calendar was split into quarters, the quarter day or first day of the quarter fell on four religious festivals roughly 3 months apart and close to the 2 solstices* (24 June – Midsummer Day and 25 December - Christmas) and 2 equinoxes** (25 March – Lady Day and 29 September - Michaelmas). These four quarter days were traditionally the dates in each year on which servants were hired, and rents were due.

Until 1752 Lady Day was the start of the New Year (now moved to January 1st) and this is why it was used as the start of the tax year too.

When the Gregorian calendar was adopted in favour of the Julian calendar in 1752 the 2 calendars were out of step by 11 days, due mainly to the different ways leap years were accounted for. As it was felt unacceptable for the tax authorities to lose out of 11 days revenue the start of the tax year was moved to 5 April. It remained as the 5 April from 1752 until 1799, but was moved to 6 April in 1800 due to a ‘skipped’ Julian calendar leap year day. The start of the Tax year has remained as the 6 April ever since.

Although the significance of quarter days is now limited, some leasehold payments and rents for business premises in England are often still due on the old quarter days, the tax authorities use these dates for the tax year and English Universities still base their term and fees dates around them.

So now you know!