Springtime in the UK means lambs and Easter eggs – but also the end of one tax year and the beginning of the next.
If you’ve ever wondered why business in our country puts such emphasis on April 5 and 6, you might be surprised. This convention was established centuries ago.
The UK is in fact very rare in having a tax year end on April 5, which in 2022 falls on a Tuesday.
The reasons for this date back to the Middle Ages, when the tax year end coincided with Lady Day, or the feast of the annunciation, a Roman Catholic religious festival on March 25.
It was moved to 5 April in 1752 as part of the UK’s switch to the Gregorian calendar – the solar dating system named after Pope Gregory XIII, and used by most of the world.
Most other countries, including the USA, France, Germany and Ireland, align their tax years to the calendar year, and some campaigners feel the UK should too.
The UK Government’s Office of Tax Simplification recently reviewed this state of affairs but, aside from recommending moves to allow self-employed people and individual landlords to use March 31 instead of April 5 when reporting their income, to facilitate Making Tax Digital for Income Tax, no immediate changes are expected.
So what do HR managers need to be aware of at this time of year?
At Delphi we’re not specialists in financial matters so we won’t start to discuss the intricacies of payroll processes, and why April is a good time to make changes and improvements.
But, of course, matters of pay and benefits cross into HR territory and this point in the year is often when reviews take place.
As always, there are a few new legislative changes that HMRC plans to roll out at the beginning of next month. These include uplifts to the National Living Wage, Statutory and Sick Pay. We recently discussed these and more on this blog.
Communicating such changes, and making sure employees receive their P60s – that important statement of tax paid during the year – in a timely manner, are among the tasks that may fall to you.
Watch out too for the new Health and Social Care Levy which was announced on 7 September 2021, and is being implemented, by means of an increase to National Insurance contributions, to increase funds for the NHS in April.