The UK government does its financial planning and prepares financial statements using 1 April to 31 March as its financial year. The UK tax year ends, however, not on 31 March but on 5 April. Here’s why.
Historically, in Britain taxes were due on the first day of the year, which was not 1 January but 25 March (Lady Day). When Britain moved from the Julian calendar to the Gregorian calendar in 1752 it was necessary to ‘lose’ 11 days so that 2 September 1752 was followed by 14 September 1752. Taxpayers did not want to have to pay their taxes 11 days early when the following March came around. So, in 1753 the end of the tax year moved 11 days from 24 March to 4 April.
Then, in 1800 another day was ‘lost’ compared with the Julian calendar because in the Gregorian calendar 1800 was not a leap year. Thus, the last day of the tax year became 5 April.
Another day was ‘lost’ in 1900 but by this time the British government was not so amenable to the merchants and did not change the dates of the tax year and it has remained 5 April ever since.