When is the end of the tax year 2022? New tax year start date - and what it means for taxes

The end and beginning of the tax year have been held on the same dates in the UK for more than 200 years

Unlike the calendar new year, the new tax year is often a rather less joyous occasion.

A time of tax changes and extensive paperwork for self-employed people, it can be a chore at best and painful for your wallet at worst.

The latter is particularly true for this new financial year given the combination of the cost of living crisis and the UK Government’s aim of paying for the vast public spending that took place during the Covid pandemic.

So when does the new 2022/23 UK financial year begin - and how will it alter taxes for the next 12 months?

Here’s everything you need to know.

HMRC are likely to get in touch with you soon if you’re self-employed (image: Getty Images)

When does the financial year end?

Typically, the new tax year is when changes to taxation are made.

This system was part of the reason why the Chancellor of the Exchequer delivered a Budget speech every spring - although Rishi Sunak’s predecessor Philip Hammond moved it to the autumn and introduced a Spring Statement (essentially a financial policy update) in its place.

Because the timing of the new tax year never coincides with the start of the month, most tax changes took effect on 1 April - known this year as ‘Bleak Friday’ - for ease.

For example, VAT, car tax and council tax all increased on this date.

The tax year starts and ends in April because it was traditionally the time when people would pay rents (image: PA)

National Insurance is the only universal tax that’s changed at the start of the new tax year.

Alterations to state pensions and benefits, like Universal Credit and Child Benefit, will not kick in until Monday (11 April).

The previous 2021/22 tax year ended at midnight on 5 April, while the new 2022/23 financial year came in on Wednesday (6 April).

It ends and starts on these same dates every single year, regardless of weekends or bank holidays.

The reason why it takes place on this specific date is historical.

The Budget used to be held at this time of year to coincide with the new UK financial year (image: Getty Images)

It originates from when people in England had to pay rent to their landlord.

This was done on a quarterly basis - 25 March, 24 June, 29 September and 25 December.

Given the March date was the first one of the new year, it came to be regarded as the beginning of the financial year.

Europe moved from the Julian calendar to the Gregorian calendar in 1582, with the UK only following suit 170 years later in 1752.

This time period saw the two calendars become 11 days out of step with one another.

So when the UK finally joined up with the rest of Europe, it did so on 25 March and then removed 11 days from the calendar overnight - meaning the new tax year began on 5 April.

It then moved to the following day 20 years later to accommodate for leap years.

This arbitrary system has been criticised by many and in September 2021, a Government review of the practice found many people would prefer the date moved to either 31 March or 31 December (a move that would bring it in line with the US tax year).

However, moving the financial year would come at a “significant” cost, the review said.

What does the start of a new financial year mean for taxes?

As we’ve already mentioned, new tax years now rarely directly coincide with changes to taxation.

But they do still matter if you’re self-employed.

If you’re your own boss, you will receive a letter from HMRC requiring you to fill out a tax return for 2021/22 if you have been self-employed as a ‘sole trader’ - i.e. the exclusive owner of your business - and earned over £1,000 (before tax relief deductions) during the last 12 months.

The worst cost of living crisis for decades means we have to be more vigilant than ever about our finances (image: Getty Images)

You also have to do one if you were a partner in a business partnership in the 2021/22 tax year.

Those who have just become self-employed for the first time have to register with HMRC for tax and National Insurance purposes - and will have to begin collecting business receipts and bank statements from 6 April to fill out their first tax return next year.

But don’t panic if you’re required to do a tax return, as you’ll have until 31 January 2023 to complete it (or 31 October 2022 if you do it in paper format).

Failure to do so sees interest added to the tax you owe from 1 February and a £100 late fine if you don’t file it until after 28 February 2023.

New financial year ‘spring cleaning’

Even if you’re not self-employed, the new financial year may be a good time to check your tax code.

Sometimes, payroll employees can be put on the wrong one by HMRC - meaning they may have been overcharged.

To do this, check your P60 - a document your employer has to provide after the end of a tax year that shows what tax you paid on your salary.

You can use this Government tool to see if you paid the right amount.

If you haven’t, and you’ve been on the wrong tax code for a few years, you can claim back for the last four financial years.

The new financial year also allows you to put money into a new tax free Individual Savings Account (ISA).