When does the new tax year 2023 start? UK tax year end date and what it means for your money explained
The start of a new financial year has been held on the same date in the UK for more than 200 years, with April 2023’s edition bringing major tax hikes with it
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Unlike the calendar new year in January, the new tax year in April tends to be a less joyous occasion - for most people, at least.
It is the time of year when most tax changes are brought in, and often sees many companies and suppliers hike their prices. Because of these factors, a new financial year can be a painful time for household budgets.
With the worst cost of living crisis for decades currently raging in the UK, this is particularly true for April 2023’s changes. An already high national tax burden is getting even steeper for many, with income tax bands having been frozen (an effective tax hike) and capital gains tax rising. Some businesses will also feel the pinch in the form of an increase to corporation tax.
It all comes as several key household bills are soaring from this month onwards. Everything from council tax to water bills, as well as mobile and broadband deals have been subject to increases - some by double-digit percentages.
So when does the new 2023/24 UK financial year begin - and what does it mean for your money?
When does the new financial year start?
Typically, the new tax year is when changes to taxation are made. This system is part of the reason why the Chancellor of the Exchequer delivers a Budget speech every spring.
Jeremy Hunt’s predecessor Philip Hammond moved the fiscal event to the autumn and introduced a Spring Statement (essentially a financial policy update) in its place. But the Budget has since moved back to its springtime slot, as we saw earlier in March.
While the timing of the new tax year never coincides with the start of the month, most changes are usually brought into effect on 1 April. The reason for this is that it makes it easier for households to calculate their bills.
The 2022/23 tax year ended at midnight on Wednesday 5 April, while the new 2023/24 financial year came in at 12.01am on Thursday 6 April. It starts and ends on these same dates every single year, regardless of whether they fall on weekends or bank holidays. The reason why is historical.
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 following suit 170 years later in 1752. Over this period, the two calendars became 11 days out of step with one another.
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. In September 2021, a government review of the dates found many people wanted to move the event to either 31 March or 31 December (the latter would bring the UK in line with the US). However, any changes to the financial year would come at a “significant” cost, the review warned.
What does the start of a new financial year mean for taxes?
As we’ve already mentioned, new tax years rarely directly coincide with changes to taxation. While taxes tend to be put up around them, the date on which they fall is only really significant for the self-employed.
You will get a letter from HMRC requiring you to fill out a tax return for 2022/23 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. You also have to do one if you were in a business partnership in the 2022/23 tax year. But the deadline for your return will not fall until next January (although there is an earlier deadline for physical returns sent by post).
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.
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.