When Does the UK Tax Year End and Why It Matters

The UK tax year operates on a unique cycle, differing from the standard calendar year. Understanding this timeframe is important for managing financial affairs and complying with tax obligations. The tax year dictates how income is assessed, when allowances reset, and the deadlines for filing returns and making payments. Properly accounting for this period can help individuals optimize their tax position and avoid potential penalties.

The Specific End Date

The UK tax year consistently concludes on April 5th, with the subsequent tax year commencing on April 6th. This distinctive date has historical roots in calendar reforms. Prior to 1752, Great Britain followed the Julian calendar, where the new year began on March 25th, known as Lady Day.

In 1752, Great Britain transitioned to the Gregorian calendar, which necessitated skipping 11 days to realign with the solar year. To ensure no loss of tax revenue, these 11 days were added to the end of the tax year. Consequently, the tax year that would have ended on March 25th effectively extended to April 4th, with the new tax year starting on April 5th. A further adjustment occurred in 1800 because that year was a leap year in the Julian calendar but not in the new Gregorian system, shifting the start date by one more day to April 6th, where it has remained.

Why the Date Matters for Your Finances

The April 5th tax year end influences how various forms of income are recognized and how annual tax allowances are applied. All income, whether from employment, self-employment, or rental properties, earned between April 6th of one year and April 5th of the next is attributed to that specific tax year. This means that income received or accrued within this period is subject to the tax rules and rates applicable to that tax year.

The tax year end also marks the reset of various annual tax-free allowances and exemptions on April 6th. For instance, the Individual Savings Account (ISA) allowance, which is currently £20,000, resets annually. Any unused ISA allowance from the preceding tax year is forfeited and cannot be carried forward, emphasizing a “use it or lose it” principle. The Capital Gains Tax (CGT) annual exempt amount, which was £3,000 for the 2024/25 tax year, also resets, allowing individuals to realize gains up to this threshold without incurring CGT liability.

The pension annual allowance, set at £60,000 for the 2024/25 tax year, also resets with the new tax year. This allowance dictates the maximum amount that can be contributed to pension pots with tax relief in a given tax year. While unused pension allowance can be carried forward for up to three previous tax years, the April 5th deadline marks the end of the period for which contributions count towards the current year’s limit. April 5th serves as a cut-off for individuals to utilize these allowances and make tax-efficient investments or contributions for the expiring tax year.

Actions and Deadlines Following the Tax Year End

For many individuals, particularly the self-employed or those with other untaxed income, the period immediately following April 5th involves preparing for their Self Assessment tax return. Individuals who need to complete a Self Assessment return must register with HM Revenue and Customs (HMRC) by October 5th after the end of the tax year in which they became self-employed. This return reports income, gains, and allowances for the tax year that just concluded.

Specific deadlines apply for submitting these returns to HMRC. A paper tax return must be received by October 31st following the end of the tax year. For online submissions, the deadline is January 31st of the following year. For example, for the tax year ending April 5th, 2025, the online submission deadline is January 31st, 2026.

Payment deadlines are also tied to the Self Assessment process. Any outstanding tax owed for the previous tax year, known as a balancing payment, and the first payment on account for the current tax year are due by January 31st. A second payment on account is then due by July 31st. These payments on account are advance payments towards the next year’s tax bill, typically calculated based on the previous year’s liability. Maintaining accurate financial records is important to facilitate timely and correct preparation of these tax returns and payments, helping to avoid penalties for late filing or payment.