The fiscal year, also known as the tax year, refers to the 12-month period used by companies, individuals, and governments for tax and accounting purposes and serves as the basis for calculating annual taxes, turnover, profits, and losses. While a standardised global financial year might simplify things for finance professionals, different countries will operate their own unique fiscal year dates, regulations, and processes – making it even more important to be aware of key dates if you operate globally! For example, in Australia, the fiscal year runs from July 1st to June 30th; in the USA, the fiscal year runs from October 1st to September 30th; in China it’s January 1st to December 31st; in Japan it’s April 1st to March 31st, and here in the UK it’s April 6th to April 5th – making the start of the tax year land on a Saturday for the 2024-25 fiscal year.
Why does the tax year start on April 6th in the UK?
Unlike many other countries whose tax years begin on the first of a given month, the UK’s tax year uniquely runs from the 6th of April to the 5th of April the following year. While seemingly random, this date has some interesting history – back in the 1700s, the UK still used the Julian calendar but in their efforts to become better synchronised with the rest of Europe, opted to adopt the Gregorian calendar. Due to the differences in the calendars (and lack of Leap Year in the Gregorian calendar), the new fiscal year fell on the 25th of March, however, the conversion from one calendar to the other also removed 11 days from the financial year in 1752. To compensate for this, the Treasury moved the dates so that there would be 365 days between the start and end of the financial year, resulting in the new fiscal year start date of the 5th of April. However, in 1800, this was moved again to the 6th of April due to discrepancies brought on by Leap Years, and the 6th of April has since remained the start of a new tax year in the UK.
Key Dates to Remember in the UK Fiscal Year (2024-25):
- 4th of April 2024: Deadline for PAYE registration. (Add to Google Calendar)
- 5th of April 2024: Corporation tax payment for the year to 30/06/23 (unless quarterly instalments apply). (Add to Google Calendar)
- 6th of April 2024: Start of the new fiscal year for the government and individuals. New tax rates and regulations come into effect. (Add to Google Calendar)
- 19th of April 2024: Employer PAYE & NIC deductions, CIS return and tax for the month to 05/04/24 (due 22/04/24 if you pay electronically). (Add to Google Calendar)
- 30th of April 2024: Annual Tax on Enveloped Dwellings (ATED) returns and payment for the chargeable period starting on 1st of April 2024. (Add to Google Calendar)
- 31st of May 2024: Deadline for companies to provide all current employees on their payroll with their P60 documents which summarise their total pay and deductions for the year. (Add to Google Calendar)
- 6th of July 2024: Deadline for employers to report employee benefits and expenses via P11D submission to HMRC. (Add to Google Calendar)
- 5th of October 2024: Deadline to register for Self Assessment tax returns. Check HMRC’s website to determine if you fall under the Self Assessment category. For the 2023/2024 tax year, registration must occur by the deadline above. (Add to Google Calendar)
- 31st of December 2024: Deadline to report capital gains. (Add to Google Calendar)
- 31st of January 2025: Deadline to submit Self Assessment tax returns and pay Capital Gains Tax. (Add to Google Calendar)
- 5th of April 2025: End of the current fiscal year. (Add to Google Calendar)
Preparing for the 2023-24 Fiscal Year-End
The fiscal year-end is a critical date on the financial calendar and you are responsible (and liable) for meeting all applicable year-end deadlines and supplying financial information to HMRC. Accountancy services from companies such as MMG Chartered Accountants can also support you in submitting your accounts, as well as collecting all relevant information and reconciling that data for the financial year. This is especially important as inaccurate or incomplete statements can pose significant risks to you or your company, potentially resulting in an investigation from HMRC but also impacting your access to loans, credit, and investments.
The key challenges when preparing your accounts (and how to solve them):
- Errors in manual data entry: accidental mistypes and human error can create a challenge for your year-end accounts and delay the process while issues are resolved, so getting ahead on your accounts is key.
- Missing documentation: anything from missing receipts and invoices to documents or even signatures on documents can disrupt or delay your statements, so ensuring everything is in place from day one is extremely important.
- Unidentifiable payments: unclear transactions with confusing references and a lack of supporting documents can make it harder for your accountant to finalise your year-end reports, so it’s important to help out your future self (or team) and ensure all references make sense and will be clear even to someone who isn’t familiar with your business.
- Duplicate entries: accidental duplication can significantly distort your year-end statements which is why it’s so important to properly date and reference entries (or create a format that works for you and stick to it). Removing duplicates manually can become quite time-consuming, so introducing technology in your business can help you stay on track if manual logging is becoming too difficult to manage can be a huge help!
- Reconciliation complexities: Anyone who’s had to reconcile accounts previously can tell you that doing the process manually can quickly become confusing if there are other errors elsewhere in your accounts! Accounts, bank statements, accounts payable, accounts receivable, inventory, and more include a lot of moving parts and balancing the books easily the first time can be a rare joy!
Making your financial year easier (for this and future fiscal years!)
While there may be many challenges when doing your accounts, these days there are also affordable tools and support available to help things run more smoothly and alleviate the manual burden of repetitive tasks. Options include:
- Digital accounting software: Implementing cloud-based accounting software automates many tedious and error-prone tasks such as data entry, calculations, and reconciliations. This can free up your time to focus on other areas of your business.
- Real-time data integration: Integrating your various financial systems and touchpoints can allow for real-time access to accurate and up-to-date financial data, giving you quick stats and an at-a-glance overview of your financial standing 24/7 without having to log into multiple portals. This can also help flag emerging issues such as invoices that are overdue and more, prompting a more proactive and organised approach to prioritising tasks and contributing to a smoother year-end.
- Automated workflows: Automating repetitive tasks such as sending reminder emails for outstanding invoices or approvals can save you many hours of manual work and also reduce the risk of human error and duplication.
- Data visualisation tools: If you have a bigger team or you’re operating multiple areas of a business, data visualisation can help you gain a better understanding of each department’s financial standing as well as help you generate financial forecasts, income projections, and lots more! This can also make it easier to share data with your stakeholders and collaborate with your team.
Contact MMG Chartered Accountants
Make MMG Chartered Accountants your trusted partner for comprehensive accountancy services in Scotland. We are committed to helping you achieve your financial goals and secure a prosperous future. Contact us today to schedule a consultation and discover how we can empower you to take control of your financial well-being. Contact our team at mail@mmgca.co.uk or call your local branch.