But why do we have this unusual system? Why don’t we follow the regular calendar year? The answer to this question lies in history, tax collection and a calendar change that happened over 250 years ago. 

To understand why our financial year ends in April, we need to take a step back in time to the 18th century. Historically, we followed the Julian calendar which was created by Julius Caesar and was the dominant calendar throughout the Roman Empire. With this calendar, the new year began on the 25th of March – a date also known as Lady Day. This was a key date in medieval financial matters, as many taxes and rents were due around this time. However, this calendar was slightly misaligned with the solar calendar and by the 1500s it was behind by 10 days. 

By 1752 the Julian calendar was 11 days behind the solar calendar so, it was decided that we would switch to the Gregorian calendar which had been created by Pope Gregory XIII in 1582. Much of Europe had already adopted this calendar so this helped realign us. The switch of calendars meant that we had to skip 11 days in September of 1752 to realign with the sun. As a result, the Treasury had to adjust the tax year to ensure the government did not lose out on any revenue. 

To compensate for the lost 11 days, the government extended the tax year to the 5th of April from the 25th of March. In 1800 another calendar correction led to a further adjustment, setting the tax year end on the 6th of April, where it remains today for personal taxation purposes. 

Why hasn’t it changed? 

Despite this being the system for more than 200 years, we have continued to use this structure for financial systems. Why? Well, to put it simply it would take a lot of work to change it and if it’s not broken, why fix it? Since the system functions efficiently, it makes sense to maintain the status quo. 

So, if you ever find yourself wondering why our financial year seems to end at an odd time of year, just remember you can thank Julius Caesar and Pope Gregory XIII.