The OTS (Office of Tax Simplification) has launched a new policy paper, “Review of potential for moving the tax year end date: Scoping document”.
The general background to this is changing the UK’s tax year. Currently, HMRC use a tax year which starts on the 6 April and runs until the 5 April the following year. This has been in place for hundreds of years, introduced around 1800 following the introduction of the Gregorian calendar in 1752.
Many countries worldwide use different dates, such as end of the calendar year (31 December), such as USA, France and Germany. Ireland moved their tax year from the 5 April end date to 31 December back in 2002 to make dates match the calendar.
The OTS is currently looking at two possibilities to make the tax year simpler for taxpayers:
- moving the end date to 31 March
- moving the end date to 31 December
The review is expected to run over the next few months, and then publish their findings in the summer, with recommendations to HMRC and the Exchequer on the options for moving the tax date.