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I was just wondering why in the UK the fiscal year starts in April. Is there any historical reason for this?

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    6 months from the end of what year is exactly April?
    – littleadv
    Feb 7, 2012 at 19:57
  • Sorry, I've corrected the question, I wasn't thinking straight when I wrote it!
    – jaffa
    Feb 8, 2012 at 9:46
  • FYI: Australia's fin year starts on July 1. There are other 'years', such as the legal year that starts on October1 (UK & US).
    – dave
    Feb 8, 2012 at 10:20
  • In India, also we have April-March as fiscal year. I do not feel there is any specific reasons for these dates. Feb 8, 2012 at 14:01

2 Answers 2

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Historically, the year (for all purposes) began on March 25th. When Britain finally switched to the Gregorian calendar, 12 days were skipped - so to make sure the tax year in the year of the switch was still the normal length, the next tax year was started on April 6th.

From Wikipedia, Taxation in the United Kingdom:

The odd dates are due to events in the mid-18th century. The English quarter days are traditionally used as the dates for collecting rents (on, for example, agricultural properties). The tax system was also based on a tax year ending on Lady Day (25 March). When the Gregorian calendar was adopted in the UK in September 1752 in place of the Julian calendar, the two were out of step by 11 days. However, it was felt unacceptable for the tax authorities to lose out on 11 days' tax revenues, so the start of the tax year was moved, firstly to 5 April and then, in 1800, to 6 April.

The tax year is sometimes also called the Fiscal Year. The Financial Year, used mainly for corporation tax purposes, runs from 1 April to 31 March. Financial Year 2011 runs from 1 April 2010 to 31 March 2011, as Financial Years are named according to the calendar year in which they end.

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This explanation is similar to many others online but, in my view, this one, like the others, is wrong.

First, as you say, eleven days were omitted in September 1752 but, in fact, nothing was done to change any tax year until six years later when the window tax year changed to a year “from” 5 April in 1758.

Second, land tax, the more important tax of the two charged by the year, kept a year “from 25 March” all its life—from introduction in the late seventeenth century until abolition in 1963.

Third, it was the taxpayer and not the Treasury who lost because of the short year. The two taxes in 1752 charged by the year did not capture actual income. Instead the charge fell on a fixed annual value in the case of land tax (like the old rates charge) and on so much per window in the case of window tax. You paid the same whatever the length of the chargeable period.

Fourth, there was no further change in 1800 and the first income tax year ran “from” 5 April 1799.

The key to understanding the missing day lies in the statutory charging rules which applied the old direct taxes to a year “from” 25 March and subsequently to “from” 5 April in the case of income tax. Lawyers of the day—as they do now—understood “from” a date to mean a period beginning on the following day. This rule of interpretation dates back at least to Sir Edward Coke’s monumental work Institutes of the Lawes of England. The first volume of 1628, usually called Coke upon Littleton, contains Sir Thomas Littleton’s 1481 treatise on property law with an English translation and commentary by Coke. The relevant passage is at 46.b:

‘ . . . But let us return to Littleton. Touching on the time of the beginning of a lease for yeares, it is to be observed, that if a lease be made by indenture, bearing date 26 Maii &c to have and to hold for twenty one yeares, from the date, or from the day of the date, it shall begin on the twenty seventh day of May.’

This means the old tax year for land tax and window tax actually began on 26 March. When the charge moved to “from” 5 April the year then began on 6 April. Nineteenth century income tax legislation later clarified matters without changing the substance by specifying a year beginning on 6 April. The Office of the Parliamentary Counsel has statute drafting guidance online and this warns against the use of “from” a date in any legislation because it misleads the uninitiated—and has generated much litigation, right up to modern times.

The common explanation for the origin of the tax year, widely shared on the web, seems to derive from The Calendar: Its history, structure and improvement by Alexander Philip and published in 1921 by the Cambridge University Press. He merely gives the explanation now common without citing any authority.

The Wikipedia article cited above has been revised.

See: Why the Tax Year Begins on Sixth April. The is available both as a paper book and a free eBook from Lulu.com and, to a large extent, on Google Books.

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