Did you know? No 1
The tax year for individuals in the United Kingdom begins on the 6th April in each year and runs to the following 5th April. The reason goes back to 1752 – the year in which England and Scotland adopted the Gregorian calendar.
Historically, the legal year began on “Lady Day” (25th March). When the new calendar was adopted the year lost eleven days (2nd September 1752 was followed by 14th September).
The legal year was then changed to begin on 1st January. To prevent tax loss however, the start of the tax year was advanced eleven days to 6th April.
The tax year for companies was changed from 6th April to 1st April in 1965 when most companies ceased to be subject to income tax on their profits and were charged with the new “corporation tax”.
Did you know? No 2
Until 1993 the Queen was not charged tax on Her private income or capital gains. Nor did She pay Inheritance Tax. The view was taken that the Monarch was exempt from UK taxation. A “voluntary” arrangement was agreed with the Queen with effect from 6 April 1993. Under this the Queen agreed to pay income tax on all Her personal income, to pay capital gains tax, and to pay inheritance tax on bequests or gifts other than to Her successor. (Source: Statement by Prime Minister on tax and Royal finances, 11 February 1993.)
Did you know? No 3
The UK has a “Schedular System” of income tax (and of corporation tax). This means that different sources of income are assessed in accordance different sets of rules many contained in the same piece of legislation (Income and Corporation Taxes Act 1988).
Rents are assessed under the Schedule A rules, employment income in accordance with the Schedule E rules and so on. The figures worked out under each schedule are totaled to give the sum on which tax is paid.
This system can be traced back to 1803. In 1799 Pitt had introduced a version of income tax (abolished in 1802) which was particularly unpopular, because every taxpayer had to disclose details of his total income. This disclosure was regarded as an infringement of civil liberties.
Accordingly, when a new version of the tax was brought in in 1803, taxpayers where only required to provide details of their income under each of a number of different schedules. Returns under each schedule were then sent to different officials, so that no one person would know an individual’s total income.
Needless to say this gentlemanly tradition has not survived to the present. All returns are now made by a taxpayer to the same “Inspector”. (Source: Whiteman on Income Tax, Third Edition 1988, by Whiteman, Goy, Sandison and Sherry.)