Why the UK tax year is, different!

While much of the world neatly wraps up their tax affairs at the end of December, the UK does things a little differently - our tax year runs from 6 April to 5 April.

Why?  The answer involves history, confusion, a slightly misbehaving calendar and a few familiar names.

Take a seat, suiteSheets, this one’s a story.

A brief date with Julius Caesar

Around 45 BC, Julius Caesar introduced the Julian calendar, which became the standard across much of Europe. It set the foundations for our modern solar calendar: 365 days, leap years, and 1 January as New Year’s Day. Simple enough.

However, during medieval times, different parts of Christian Europe decided to celebrate the New Year’s Day on different dates, often linked to religious festivals. The UK chose 25 March, also known as Lady Day.

Lady Day was one of the traditional “quarter days”. Rents were paid, contracts renewed, farms organised and taxes calculated. It also marked the start of the tax year.

Everything lined up nicely with the rhythms of rural life and the arrival of spring. Everyone was happy. Probably.

When calendars go rogue

However, unlike suiteSheets, the Julian calendar had a tiny mathematical flaw - it was ever so slightly too long, some reports suggest by as little as 11 seconds! 

No matter how small, this minor inaccuracy caused a drift over time and by the 1500s it was running about 10 days behind the actual solar year, which meant the seasons were occurring earlier than the calendar suggested. 

This was a particular problem for Pope Gregory XIII because Easter, and other religious holidays, were calculated based on the spring equinox so they began falling at the wrong time of year.

Enter the Gregorian calendar

To fix this he introduced the Gregorian calendar in 1582, realigning the calendar with the seasons. Again, this was adopted throughout most of Europe, with the UK being a notable exception. That is, until 1752 when the UK finally adopted the Gregorian calendar.

The problem?  By then, the calendar was 11 days out.

The solution?  The government simply removed them.

Yes, really!  In September 1752, people went to bed on 2 September and woke up on 14 September - eleven days vanished overnight. Try explaining that to your menstrual cycle!

Unsurprisingly, taxpayers were not thrilled about losing 11 days of income while still being taxed for a full year. Rather than refund everyone (steady on), the government moved the tax year forward by 11 days to keep things “fair”.  So, 25 March became 5 April.

A new date that sticks

Then, in 1800, an additional day was added because 1800 was a leap year under the Julain calendar but not the Gregorian one.  So, 5 April became 6 April - and there it remains today.

So next time someone asks why we don’t just use January to December, you can smile knowingly and say:

“Ah yes… Lady Day. 1752. Lost days. Long story.”

Then suggest they take a seat, suiteSheets, while you tell them all about it!

What are your thoughts?  Would you change the tax year if you could?