April tax year advantages?

November 19, 2009 4:17 AM

What are the (unintended) advantages to Britain of having a tax year that starts in April?
posted by devnull to Work & Money (7 answers total)

Tax returns arent lost in the Xmas post.
posted by the cuban at 5:23 AM on November 19, 2009 [1 favorite]

Actually, tax returns are due around this time of year and are probably more likely to be lost in the post than (e.g.) an April 15th deadline in the US.

I would imagine the business cycle benefits from having the opportunity to have Christmas, followed by the January sales to balance stocks, before the close of the tax year.

But in fact, a company can choose its own tax year. Both companies I work with have a Jan-Dec tax year.
posted by sagwalla at 6:36 AM on November 19, 2009

I should clarify that you can have your own accounting year, but your tax filing years are still the same April - April.
posted by sagwalla at 6:39 AM on November 19, 2009

Now I doubt you'd find much advantage, at least I'd like to see some data supporting an assumption this seemingly arbitrary date would benefit the business cycle. If that were the case we'd probably see more variance in tax dates across the G20, if not all countries, as each nation sought to maximise benefit realised from such staggering.

But 1752 this date had a clear advantage., You see, until then Lady Day, or March 2th (the date of the conception of Jesus rather than his birth), was considered New Years Day in England.

Until, of course, the adoption the Gregorian Calendar in England. Only problem was the Julian Calendar (the prior system used in England) differed by eleven days, so when the switch on September 4th of that year it was decreed that the next day would be September 15th.

Riots ensued, reportedly because the largely illiterate population population assumed they'd been robbed of eleven days of their lives, although I've seen recent accounts of English history that more fairly presents their concerns, noting that these folks would be losing eleven days pay.

Because of the rebellious mood of the populace the tax people didn't believe they'd be able to start the new tax year on March 25th (originally New Years Day in England) as folks would be paying a full years tax on 354 days of work, so they pushed the tax year ahead to April 6th where it remains to this day.

So 257 years ago the advantage was clear: keep the populace happy.

That's the academic explanation, but from my own personal viewpoint as an American who lives in England and pays taxes in both countries: big PIA, as the years clearly don't overlap and while I'm not double taxed (100% of the time, but some revenue streams are, in fact, double taxed) I've got large amounts of money whizzing about to settle taxes in England, which are then "credited" (not in cash, tax loss carry forwards) on the US side against future tax bills.

I've had the good fortune to have lived in England for about thirteen years now, and I find the history absolutely amazing. So I try to learn as much as I can about the hows and whys of life here.
posted by Mutant at 7:11 AM on November 19, 2009 [3 favorites]

Whoops!

... or March 25th (the date of the conception of Jesus ...
posted by Mutant at 7:12 AM on November 19, 2009

these folks would be losing eleven days pay.

I thought the peasantry mostly paid excise taxes at that time - effectively pay as you go, not time specific. Income Tax (as it then was) was only for the Quality, no?

Though I could see annoyance if you were paying rent on anything other than a daily basis....

Any good reading on the topic? We yearn to know.
posted by IndigoJones at 12:11 PM on November 19, 2009

I'm speculating here, but having the financial year end in April means people need to spend their underspend in March rather than December. I can't imagine last minute roadworks and christmas shopping go well together.
posted by Helga-woo at 1:55 PM on November 19, 2009