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Life would be easier for finance professionals and business owners if every country shared the same accounting rules. However, the UK financial year 2024 follows unique dates and requirements set by HMRC. Whether you're managing business finances or handling personal tax returns, understanding these crucial deadlines helps avoid penalties and ensures compliance.
Each country has specific dates, regulations, and processes that organisations must follow. In the UK, the tax year runs differently from many other nations, creating distinct challenges and requirements for both businesses and individuals.
This comprehensive guide will explain everything you need to know about the UK financial year, including key deadlines, HMRC requirements, and essential tips for finance teams.
What is the financial year and why is it important?
The financial year refers to the 12-month period that companies, governments, organisations, and individuals use for tax and accounting reporting purposes. It’s also sometimes referred to as a fiscal year or tax year. Tax, turnover, profits, and losses are all calculated on this yearly basis.
Individuals are also impacted by the financial year. Most employees pay income tax via their employers with the PAYE (Pay As You Earn) system, which is based on the government’s tax year.
And if you’re self-employed? You have a special deadline to register and submit your income tax statement to HMRC.
The financial year is helpful for both companies and individuals to budget and assess their finances on an annual basis.
In some countries, the tax year may also line up with the calendar year, from 1 January to 31 December. But that’s not always the case in the United Kingdom.
Related reading: Expense management software
Key dates in the UK financial year
In the United Kingdom, the financial year begins on 6th April of the current year, and ends on 5th April of the following year.
When referring to a financial year, we mention both calendar years. For example, the tax year that began on 6th April 2023 and ended on 5th April 2024 would be referred to as the 2023/2024 or 2023-24 financial year.
Why does the UK financial year start in April?
Without getting too deep into the historical details, here’s a quick summary of why the UK financial year starts in April:
In the mid-1700s, the British Empire was still using the Roman Julian Calendar. They were out of sync with the rest of Europe, who had already adopted the Gregorian Calendar in the 1500s. They celebrated the New Year around 25th March, which was also the start of the financial year.
Once they switched to the Gregorian Calendar in 1752, there was still a discrepancy of 11 days between the old calendar and the new.
To make up the difference and ensure that the government didn’t lose any tax revenue that year, the Treasury moved the start of the fiscal year to 5th April, making it a full 365 days since the start of the previous tax year. This system worked up until 1800, when they needed to take a leap year into account. They moved the start of the financial year to 6th April, where it has remained since.
So now you can impress your friends at your next trivia night!
The financial year for UK companies
The standard financial year, or tax year, of 6th April to 5th April applies to the government and individuals.
It’s different for companies. While companies’ financial years also span a 12-month period, the dates usually line up with when the company was incorporated, although companies can also choose their down financial year dates. The exception is the first year of the company’s existence.
According to the HMRC:
“Your first accounts usually cover more than 12 months. This is because they:
start on the day your company was set up (‘incorporated’)
end on the ‘accounting reference date’ that Companies House sets for the end of your company’s financial year - this is the last day of the month your company was set up”
They even give a concrete example:
“If your company was set up on 11 May, its accounting reference date will be 31 May the following year. So your company’s first accounts must cover 12 months and 3 weeks.
In following years, your accounts will normally cover your company’s financial year from 1 June to 31 May.”
You can read these guidelines in more detail on the HMRC website.
So while the government financial year goes from 6th April to 5th April of the following year, companies’ financial year start dates are varied. But companies must still pay attention to the government’s fiscal year, especially tax deadlines.
UK financial year key dates
In the United Kingdom, there are a few important dates in the financial year to remember for tax purposes:
4 April - PAYE registration deadline.
6 April - The start of the new financial year for the government and individuals. New tax rates and rules go into effect on this date. This date never changes.
31 May - Companies must provide employees with their P60, a document that summarises total pay and deductions for the year.
6 July - Deadline for employers to report employee benefits and expenses. Submit the P11D to HMRC.
5 October - The deadline to register for Self Assessment tax returns. Refer to the HMRC to see if you fall under one of the Self Assessment categories. To complete a return for the 2023/2024 tax year, you must register by 5 October 2024.
31 December - The deadline to report any capital gains.
31 January - The deadline to submit Self Assessment tax returns and the payment deadline for Capital Gains Tax.
5 April - End of the financial year.
How to prepare for the end of the financial year
At the end of the financial year, the finance team has to collect, evaluate, and reconcile the company’s financial data for the year. This is known as the financial or year-end close.
The team prepares a final financial statement for potential external audit. If there are discrepancies or big mistakes in the final statement, that could spell trouble for the company.
The year-end close is similar to the month-end close and quarterly close but on a much bigger scale. For some teams, it takes the better part of a month!
The state of the company at the end of the financial year dictates the company’s decisions for the following year(s). The finance team has to provide an accurate picture of the company’s finances, and the executive team and board will make strategic choices based on this information.
The end of the financial year is particularly gruelling for finance teams. Why? This period comes with a huge workload and serious pain points, like:
Tedious, manual data entry
Human error
Missing receipts and other necessary documents
Unidentifiable payments (that must be identified)
Duplicate entries and line items (sometimes a sign of fraud)
The team must review and reconcile all the previous months’ accounts, verifying that all financial transactions in the company ledgers from the past financial year add up.
This information has to be accurate because it gives everyone (employees, investors, the government, regulators, the public) a clear idea of how the company is doing and if there are any taxes, penalties, or budget issues to take care of.
During the year-end close, the finance team has to calculate and reconcile:
Income
Revenue
Assets
Investments
Equity
And more
Then they record these transactions in the company ledgers, or books (although most finance teams moved away from physical bookkeeping decades ago). Once the books are closed, they can’t be altered. Then the books are stored within the company’s official financial records.
The best way to prepare for the end of the financial year (and handle all of these tasks) is to use a reliable checklist. We’ve got a great one here: Year-end accounting checklist.
Yes, it’s a big undertaking, and yes, the rest of the company can help make this process easier on finance teams.
Making the financial year easier on finance teams
We’d wager that your company’s finance team pays close attention to the financial year. But other teams? Not so much.
For non-finance employees, a late receipt or supplier invoice might not seem like a big deal. But the finance team carries quite a burden on their shoulders; they must adhere to the financial year deadlines or risk the company facing huge penalty fines otherwise.
There are a few things that make these deadlines easier on your company’s finance team:
Automated processes, enabled by digital accounting software. Manual tasks take up tonnes of time and are prone to human error. Because there’s already a huge time crunch associated with the financial close, it’s imperative to save time wherever possible.
Budget and spend visibility. If the finance team doesn’t have full visibility on what’s been spent and outstanding debts, they cannot completely close the books.
Accurate and timely expense reports. Don’t make your finance team chase you down for receipts! Any receipt that comes in after the financial year cut-off is a huge pain for finance teams and detrimental to the company’s financial health. Complete your expense report quickly, or better yet, use an expense management tool like Spendesk.
Quick reconciliation. This goes hand in hand with automated processes, and finance teams will certainly benefit from a digital solution.
The finance team can invest in tools that take some pressure off the end of the financial year.
Finish the financial year flawlessly
The UK financial year has its own special rhythm. Finance teams set their clocks to this 12-month period, so it’s important to know how to best prepare for this monumental annual project. Everyone is affected by the financial year.
HMRC is the best source of information regarding taxes, employer responsibility, and specific information about the financial year for different sectors.
If you're looking for resources to make your financial closing easier at the end of the year, download our free checklist here:
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