What is a Tax Year?

The UK tax year always begins on 6 April and it ends 12 months later on 5 April. Sole traders, freelancers and contractors used to be able to choose their own 12-month accounting period, however, under the new rules, accounting periods must align with the official UK tax year.

After the tax year ends on 5 April, sole traders, landlords and others who pay tax via Self Assessment have until the following 31 January to file their Self Assessment tax return online. UK tax allowances and reliefs also run from 6 April to 5 April and it can be important to use them up before the end of the tax year, because some can’t be carried over into the new tax year. Your new allowances kick in on 6 April, the day the new tax year begins.

Why does the UK tax year run from 6 April to 5 April? A good question, especially when in many other countries the tax year is aligned with the calendar year (ie it starts on 1 January in the USA and many other countries). It goes back hundreds of years to the days when people in England had to pay rent to their landlords on a quarterly basis. The first of these days was 25 March, so this became the start of the financial year. Later, the switch from the Julian calendar to the Gregorian calendar in the 1750s and the 11-day correction to more conveniently align things meant the start of the tax year in Britain became 6 April.