A tax year, also called a fiscal year or year of assessment, is the 12-month period over which income and gains are measured for tax purposes. It defines which earnings belong to a given return, when filing and payment deadlines fall, and which year's rates and allowances apply. Businesses may also have an accounting period that differs from the national tax year.
The period is not the same everywhere. The US, Italy, Germany, France, and Spain use the calendar year, from 1 January to 31 December. The UK is a notable exception: its personal tax year runs from 6 April to 5 April the following year, a legacy of historical calendar changes.
The tax year matters for timing decisions. If a self-employed person invoices work on 30 December versus 2 January, that income can fall into different tax years, potentially changing the rate applied or the allowances available. Deferring or accelerating income across the year-end boundary is a common planning technique, within the rules.
- Calendar year: US, Italy, Germany, France, Spain
- 6 April to 5 April: UK personal tax
Understanding the tax year is essential for payment on account and setting money aside. Try our tax set-aside calculator, and see tax residency.