Quantcast

Why does the new tax year start in April? Ask the pope...

calendar wars.jpg

As ever there’s a reason behind the random and it’s a much more colourful story than you might expect. A far cry from the grey suits which dominate financial news these days, our tale involves pioneering popes and trendsetting angels. So, are you sitting comfortably?

 

Medieval New Years

Over 500 years ago, the tax year started on New Year’s Day. The thing is, New Year’s Day – then called Lady Day – fell on 25th March instead of 1st January. We were a religious lot back then, so the first day of the year corresponded with the day the Angel Gabriel told Mary to paint the manger blue: you’re having a boy. That meant the start of the New Year fell 40 weeks before Christmas Day.

All accounts, including debts and rents, had to be settled by so-called financially-important “quarter days”, which also included Midsummer on 24th June, Michaelmas on 29th September, and Christmas Day on 25th December. A fun way to spend the hours between presents and Xmas lunch.

 

Time for change in the Papal States

Up until 1582, all these dates had been marked according to Julius Caesar’s ‘Julian calendar’, which had been around since 45 BC. And although it did a reasonable job of splitting up the year into months, each year was about 10 minutes too long… just like every children’s party. After the course of a millennium and a half, this added up to the Julian calendar being 10 days ahead of the sun. It was unsustainable.

And so, in the decade that Queen Elizabeth I smashed the Spanish Armada and an entire colony of settlers vanished in Roanoke, Pope Gregory XIII made the dramatic move to alter the fabric of time. Or rather, he altered the instrument we use to measure the fabric of time.

It was out with the shatterproof ruler of Julius Caesar’s ‘Julian calendar’, and in with the solar-powered spirit level of the ‘Gregorian calendar’, which would keep time more neatly aligned to the seasons.

 

Who are these Europeans telling us what to do?

In something which sounds all too familiar to modern ears, the Brits were having none of this strange European Catholic nonsense and held out until 1752. By this stage we were 11 days out of kilter with the rest of Europe. Deciding that it was about time we caught up with the rest of the world, our defiant forebears faced a financial dilemma.

If we move to the Gregorian calendar and in doing so lose 11 days of the year, what happens to the 11 days of taxes we’re owed?

The solution these boardroom boys of the past came to was to quite literally drop 11 days from the calendar – so 2nd September that year was followed by 14th September – and then push the tax year end out from 25th March to 4th April. As always, tinkering with tax is an unpopular move and riots ensued, led in part by those who felt outraged that their lives had been shortened!

One final change came in 1800 when the goalposts moved by yet another day. The change from the Julian to Gregorian calendar meant 1800 was no longer a leap year, but the money-grabbers in power didn’t want to miss out on the extra day’s taxes. The newly updated start date – 6th April – has been with us ever since.

And so, to summarise, the tax year starts on the 6th April as a result of religion, our dislike of Europe, and the greedy behaviour of tax collectors. Isn’t it good to see how much mankind and civilization has moved on since the medieval times.

What's next?

Join the thousands of people who get our weekly musings on money, great products, top tips and a dollop of opinion.

Sign up to Holly's Blog

Want to know more?

race tax deadline.jpg

5 savings-boosting tips for the end of the tax year

Your final sprint to the tax year finish line. Make the most of tax-free savings and free money from the government before it's gone. Here are 5 simple things to do.

5 ways to boost your ISA and pension before the tax year ends

limbo stocks.jpg

Holly's top picks: hottest stocks and shares ISAs 2019

Cash ISA interest rates are lower than limbo. To really put your savings to work, it might be time to consider a stocks and shares ISA. Holly picks her favourites for beginners and pros.

Hottest stocks and shares ISAs 2019

Learn the Tribal Way

What have other people been doing? Learn from their experiences.

You may think the stock market is risky. But you know how important it is to save and are fed up with getting pennies in interest every year. Overcome your suspicion and see what investing is really like.

Suspicious Savers

Related Questions

Got a Question?

Sign up for Holly's blog

Stay up to date

Our free weekly blog with Holly's
no-nonsense opinions, tips & food for thought.
If you change your mind, you can unsubscribe at any time. We'll never share your details and you can unsubscribe any time.