Why is 5th April the end of the tax year?

The UK tax year ends on 5 April – not 31 December or 31 March – because of a centuries-old decision tied to the adoption of the Gregorian calendar in 1752 and its impact on Britain financial administration.

Most countries align their tax year with the calendar year (January to December). The UK deliberately chose an offset date. Understanding why requires a short journey through British fiscal history.

The 1752 Calendar Reform

In 1752, Britain finally adopted the Gregorian calendar, replacing the old Julian calendar. The switch required dropping 11 days. Wednesday, 2 September 1752 was followed by Thursday, 14 September 1752. This affected everything from rent contracts to tax calculations.

Because the financial year had previously run from 25 March to 5 April (Julian calendar), dropping 11 days meant the year-end would fall on 24 March if not corrected. To prevent a disrupted and short financial year, Parliament moved the financial new year to 6 April 1753 – exactly 11 days after 24 March – to preserve the intended length of the year and maintain revenue collection.

The Shift to 5 April: 1900 and the Finance Act 1907

For most of the 19th century, the financial year ran 6 April to 5 April. In 1900, the year-end briefly shifted to 5 April to align with the calendar year for businesses. However, this created a short tax year (only 364 days), which caused administrative confusion and loss of revenue. The Finance Act 1907 permanently restored the year-end to 5 April and start to 6 April – a 365-day arrangement (366 in leap years) that has remained unchanged ever since.

Why Not 31 March?

Many assume the tax year should mirror the financial year (April to March) used by businesses and the UK government for budgeting. However, HMRC and the tax system deliberately use 5 April to avoid overlapping with the end of the financial year (31 March) and to give employers and HMRC adequate time to process year-end payroll (P60s, P45s, final pay) before the new tax year begins on 6 April.

Why 6 April as the Start?

The choice of 6 April is tied to the old Lady Day (25 March) rents and tenancies. After 1752, the replacement for Lady Day was 6 April, which is 11 days after 5 April. Historically, rents were paid on these dates and the tax system aligned with that rhythm. The March/April rent cycle was deeply embedded in British commercial and agricultural life, and Parliament preserved it when it reformed the calendar. By 1909, 6 April was formally entrenched as the start of the tax year.

Impact on Modern Tax Administration

Today, the 5 April year-end has practical consequences: HMRC issues tax codes on 6 April each year; employers run year-end payroll in March and issue P60s by 31 May; Self Assessment returns for the tax year ending 5 April are due by 31 January the following year; PAYE and National Insurance contributions are calculated on a tax-year basis rather than a calendar year basis. The offset also means the UK tax year always ends mid-week (typically a Sunday or Monday night), which helps employer payroll processing.

Historical Summary

• Before 1752: Tax year ran 25 March to 5 April (Julian calendar)
• 1752: Gregorian adoption shifted new year start to 6 April to preserve year length
• 1900: Brief shift to 5 April year-end for business alignment
• 1907 Finance Act: Permanently set tax year to 6 April – 5 April
• Today: Remains unchanged – a 270-year-old calendar artifact embedded in UK tax law

The 5 April end of the UK tax year is therefore not arbitrary – it is the product of a specific historical compromise between calendar reform, revenue administration, and the commercial rhythms of 18th and 19th century Britain.