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  • Thieving the day – why does the tax year end on April 5

    1 April 2021

    Andy Wood

    Background

    So, it’s almost tax year end.

    After putting off making SIPP and ISA contributions and making EIS investments for 99% of the year, individuals will be desperately trying to sort out too much year end planning in too little time.

    Of course, we are always happy to assist in such matters.

    However, fully aware that people are more interested in useless factoids (that may or may not come up in a pub quiz – remember pubs?) I thought it would be useful to address the question you’ve been dying to ask…

    …why on earth does the tax year end on 5th April?

    There is obviously a sensible, straightforward reason, right?

    Lady Day

    Perhaps surprisingly, up until 1752, the new year in England did not begin until the Spring equinox on the 25th March. This was called Lady Day.

    Lady Day was one of the so-called quarter dates. These traditionally became the dates when rents fell due but also the basis on which school terms were operated.

    It also became the date on which long-term contracts between a farmer and their landowner would be entered in to. 

    As such, it became the first day of the fiscal year.

    Pope Gregory XIII

    Now to 1582, when the Pope introduced a more accurate calendar – the Gregorian calendar – in 1582.

    At the time, this was vital Pope business.

    To be fair, he had discovered that the Julian calendar was around 11.5 minutes ‘behind’ the solar calendar each year.

    The Europeans began to adopt this ‘Gregorian’ calendar almost immediately. As always, England did not like to be told what to do by the Europeans – particularly by Catholics. As such, it did not adopt the new-fangled calendar until almost two centuries later. 

    Incidentally, the Scots had switched in 1600.

    Short years and stolen days

    Grudgingly, and perhaps becoming tired of ‘double-dating’ documents, England did eventually fall into line when Parliament published the Calendar Act.

    So, 1751 became a short year – lasting from March to December.

    However, by this time, all those 11.5 minutes had added up and England was, quite literally, 11 days behind most of the rest of Europe.

    What should be done?

    In modern times, we grumble about having to change the clocks each year. But, in the year 1752, it was announced that Wednesday 2 September would be followed by Thursday 14 September 1752!!!

    [Note – Mrs Wood’s birthday would have fallen into this period – I wonder if this would have been a legitimate excuse for not buying a card / present?]

    What price a day (or 11)?

    Anecdotally, it is said that the loss of 11 days provoked riots in the streets.

    The population had been robbed of 11 days – but, importantly, their taxes were still due on the 24 March.

    So, as compensation(!), it was decided that the new tax year would begin 11 days later on 6 April.

    And that, as they say, was that.

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    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

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