AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
.jpg)
_07_04_2025_07_17_24_352003.jpg)
Highlights
- The Office of Tax simplification is looking forward to update the UK’s tax structure by changing the end date from 31 March to 31 December.
- A survey conducted by BDO showed that around 91 per cent of small and medium-sized business are in favour of updating tax year date.
The UK’s Office of Tax Simplification (OTS) is looking to update its centuries old end of the tax year date from April 5 to either March 31 or the end of the calendar year.
In June, the OTS published a report, looking at the pros and cons of changing the tax year date, with a more comprehensive report to be published later this summer.
Businesses are in support to change the end of the UK tax year to simplify the accounting process for companies that operating outside UK, which will bring it in line with most other countries.
The UK tax year currently run from 6 April to 5 April next year, whereas in majority of other jurisdictions it follows the calendar year. This is because the UK started following Gregorian system from Julian in 1752, which removed 11 days from the calendar. So, the country’s modern tax system and infrastructure was developed around this change.
ALSO READ: How hospitality sector desires to overcome ‘Pingdemic’ hurdles
Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said that changing the tax year can simplify the wider tax systems and has potential to provide a welcome simplification in the tax of many companies’ cross- border operations, but it should be noted that these changes should be made carefully to avoid adding to the cost and administrative obligations faced by the companies.
Last week, a survey published by BDO showed that around 91 per cent of small businesses supported the proposals to update the tax year date from 6 April to the end of the calendar year. Around 500 UK companies with revenue between £10 million and £300 million participated in the survey.
Paul Falvey, tax partner at accountancy firm BDO, said: “Changing the tax year pattern will be welcomed by businesses of all sizes and will be particularly helpful for those with international connections. The transition has to be planned carefully.”
He added that the 31 December year-end proposal would make it simpler for the businesses with international operations and HMRC, as aligning the year end with other countries will help taxpayers to calculate and for HRMC to know that the correct amount of tax is paid by the businesses with operations in other countries.
Recently, the Institute of Chartered Accountants in England and Wales and Chartered Institute of Taxation has been insisting the government to consider updating the end date to 31 March or 31 December.
Ireland previously ended its tax year on April 5. However, it switched when it joined the Euro in 2020. Other countries such as Germany, France and the US have the same tax calendar.
Falvey said that its time to update the tax year and move to the new system, which would be three and five days shorter to run from April 6 to December 31.
This could lead to an acceleration of tax for businesses in that year.”
ALSO READ: How UK’s fintech sector reached an all-time high
The OTS said that it would consider the suggestion for the tax gap, Exchequer and compliance generally, in particular relation to PAYE, Capital Gains Tax, Income tax, Inheritance Tax and National Insurance contributions.
A HMRC added that the review was an own-initiative review by the Office of Tax simplification (OTS). "We will consider the findings once the report is published," it said.
"The OTS provides independent advice for the government. It is on government to make decisions on tax policy.”
