If like me, you have looked at the tax month dates and payment dates and thought what is going on, I hope this article will provide some insight into how this came about and why.
As we are all aware, or should be, tax months run from the 6th of the month to the 5th of the following month, with the tax year ending on the 5th April. Payments to HMRC for payroll liabilities are due by the 20th of the month.
This history of this is a little more complex and goes back to Julius Caeser and Britain’s dubious relationship with the Catholic church over the years.
The 20th piece is the easier question to answer it relates to historically having manual tax collectors and with the 5th being the end of the tax month it gave the collector chance to go round and collect the “taxes” from their area and deposit centrally.
The reason for the 5th of the month being the end of each tax month is slightly longer and more convoluted.
The Roman calendar was only 355 days long, which doesn’t mirror the solar calendar so occasionally the Roman’s squeezed in a thirteenth month to realign the calendar with the solar calendar. This wasn’t managed very well and Julias Caesar then implemented the Julian calendar, in 42BC, of 365 days with a leap year every four years.
Over a longer period of time a leap year every four years is actually an over correction, so by the 1500s there was an over correction of 10 days against the solar calendar. The Catholic church were concerned that the spring equinox was mover earlier and earlier and in 1582 Pope Gregory XIII proposed the Gregorian calendar, that we use today, which included a formula for skipping leap years at designate intervals to avoid the problem of over correction, if you are interested the next time this happens is 2100.
Due to it’s relationship with the Catholic church Britain decided to not adopt the new calendar at this time so for a period of time the British calendar and the rest of Europe was different by 10 days. In 1752 this difference had grown to 11 days and finally we decided to do something about and adopt the Gregorian calendar, see Calendars Act 1750.
Until this point the tax year in Britain aligned with New Years Day, which at the time was 25th March (Christian Annunciation Day) so with the adjustment of 11 days it moved the start of the tax year to be 5th April to maintain the tax year as 365 days. This was again adjusted to the 6th April in 1800 when it would have been a leap year in the old Julian System but wasn’t in the Gregorian and this date has remained since.
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