MTD : Fiscal Year still 5th April for some. Why?

MTD : Massive changes but overlooking the obvious.

Didn't find your answer?

With £1300 million being spent on MTD, consultants galore advising HMRC, the biggest change to tax administration ever, and no one seems to have thought about changing the fiscal year end for personal taxation to the 31st March to bring it in line with corporation and government fiscal years.

A small point perhaps, but would life not be easier if everyone worked to the same sensible date of 31st March.

How mad is it that whilst we work to month ends for accounting, salaries & wages, PAYE works to the 5th of the following month ... and myriad other examples. If you are going to make expensive changes to tax administration, then it really should be done properly.

I wonder what all these expensive consultants are doing if they have not even picked up on the obvious, or is it me that has missed something?

Replies (9)

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RLI
By lionofludesch
10th Dec 2016 16:51

Some traders genuinely have seasonal businesses.

We discussed all this twenty-odd years ago.

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By Joe Soap
10th Dec 2016 16:56

In 1752 the UK switched from the Julian calendar to the Gregorian calendar in order to bring UK dates and years into line with the rest of Europe. This was a very sensible thing to do because the Gregorian year more accurately matches the actual time it takes the earth to go around the sun. It was NOT imposed by some EU rule.

Having used the Julian calendar for centuries the UK was, at the point of the change, was out of step with the Gregorian calendar and had to drop 11 days to come into line. So you went to bed on (say) 10 May and when you got up it was 21 May.

There were riots and protests as the people felt cheated - the placards said "give us back our 11 days" and the like.

The people may have been cheated (or not) but the Government was having none of that. So the end of the government's financial year was moved from 25 March (which is still a quarter day for rents and such) so that they had a full year of tax.
11 days from 25 March is 5 April.

Simples.

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Replying to Joe Soap:
Tornado
By Tornado
10th Dec 2016 16:59

Yes indeed, but the point is why do the MTD proposals not include changing this to the 31st March which is a more logical and convenient date.

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Replying to Tornado:
RLI
By lionofludesch
10th Dec 2016 17:48

Personally, I like the eccentricity of 5th April.

But I'd run with it so long as we all got a full year's personal allowance for only 360 days pay.

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Replying to Joe Soap:
RLI
By lionofludesch
10th Dec 2016 17:03

It was 2nd September one day and 14th September the next.

Madder than that was that New Year's Day was 25th March.

Except in Scotland, where it was January 1st from 1600 - so just 152 years before EnglandandWales caught up. So when James VI crossed the Tweed, he stepped back in time.

Obviously Ireland wasn't in the UK at the time.

I've never actually found out who thought it was a good idea to have a new year start in the middle of a month.

Absolute madness.

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Replying to Joe Soap:
By petersaxton
10th Dec 2016 22:52

you went to bed on Wednesday 02/09/1752 and when you got up it was 21 Thursday 14/09/1752!

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By petersaxton
10th Dec 2016 22:59

I would change the year to end on 31 March. 5th April is madness. So many of my clients can't understand when the year/month ends even after I tell them dozens of times. I would go the full hog and have the tax year the same as the calendar year. There still seems to be long conversations before you can be sure what period a client means. I'm not sure why seasonal businesses have any bearing on the issue.

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Replying to petersaxton:
RLI
By lionofludesch
11th Dec 2016 09:37

petersaxton wrote:
I'm not sure why seasonal businesses have any bearing on the issue.

It's a reporting issue. It makes no sense for - say - a soccer club to report make its accounts up to a date in the middle of a season.

And whilst I've drawn companies into it, they manage to cope with having reporting periods which span two financial years. Why not individuals ?

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Out of my mind
By runningmate
11th Dec 2016 14:23

I cannot help thinking that a good date for the end of government accounts and income tax etc year would be 31 December.
Call me crazy if you like!
RM

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