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A brief history of the UK’s tax year

January 1 marks the start of a new year and, for most of the world, a new tax year too. For the UK though, this is not so as our new tax year begins on April 6. Here we impart the tale of why we use this date…

The tale of our tax year – Part 1: Minutes, days and years

Back in 1582, Pope Gregory XIII instructed a change from the Julian Calendar (named after Julius Caesar) to the Gregorian Calendar.

The Julian Calendar comprised eleven months of 30 or 31 days with February the exception, having either 28 or 29 days. This worked well for around 1600 years. However, one major point to note is that it differed from the Solar Calendar.

The Solar Calendar reflects the actual time taken for the earth to travel around the sun. It diverged from the Julian Calendar by approximately 11½ minutes per year.

By the late 1500’s this discrepancy had put the Julian Calendar behind the Solar Calendar by 10 whole days.

So, in 1582, Europe changed to a new system. Three leap days were omitted every 400 years by authority of a papal bull known as “Inter Gravissimas”. Hence, the problem was solved.

The UK, however, opted not to adopt this system, instead continuing with the Julian Calendar.

Consequently, for the next 170 years there existed a difference of at least 10 days between Britain’s calendar and Europe’s. Under the new rules, 1600 resulted in another day’s difference and so, by 1752, Britain was 11 days out.

The tale of our tax year – Part 2: Time to catch up

England finally accepted, at this point, that it was time to make a change.

In England and Ireland, the four main Christian religious holidays (including Christmas Day) had been used as “quarter days”. These were days on which debts, accounts and rents had to be settled. The first fell on “Lady Day”, being 25 March, also New Year’s Day and the first day of the British tax year.

The decision was made to drop 11 days from September in 1752 to catch up with the rest of Europe. So, September 2 was followed immediately by September 14. To minimise loss of tax revenues, however, the Treasury extended the 1752 tax year by then adding the 11 days on to the end of it. Consequently, the beginning of the 1753 tax year fell on April 5.

In 1800, a further modification was made, shifting the start of the tax year forward by one more day to April 6. Again, this was to mitigate for the differences between the Julian and Gregorian calendars. The year 1800 would have been a leap year under the Julian system, but not the Gregorian, so the Treasury treated 1800 as a leap year for taxation revenue purposes.

April 6 has remained the beginning of the tax year ever since, though it was only officiated in 1900. This was when the practice of accommodating leap years was also abandoned.

So, there you have it…the who’s, where’s and why’s of how the UK established its tax year.

Some tax facts, just for fun

To welcome in the new tax year, we thought we’d leave you with a few fun facts about UK tax:

William Pitt the Younger originally introduced income tax as a temporary measure, in 1798, to finance the war against France.

UK Income Tax raises over £182 billion a year.

The UK’s first property tax was Window Tax, which was introduced in England in 1696 and not abandoned until 1851. It cost two shillings per house, plus extra payments for every window more than ten.

England has taxed hats, soap, wig powder, playing cards and wallpaper in the past. The tax on playing cards was not removed until 1960.

In 2016 it was estimated that the UK Tax Code is about 10 million words long.

The Queen is a UK taxpayer.

If you want to put your best foot forward when it comes to effective tax planning for the year ahead, why not contact us today, or find out more about the taxation services we offer, here.

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