The tax year could be altered to bring it into line with calendar months. The OTS (Office of Tax Simplification) has announced it will “explore potential” of moving tax year-end dates complexities but it will have historical importance to contend with.
OTS released a scoping document – Review of potential for moving the tax year end date: the document set out the scope of the review into the benefits, costs and wider implications of changing the date to the end of March, which is both the end of a calendar quarter and the nearest month end date to the end of the current tax year. This is also the UK financial year end date, to which the UK government makes up its own accounts, and by reference to which corporation tax rates apply.
The OTS has also been exploring the potential move of the end of tax year dates for individuals to the 31 December, aligning this with other major economical countries, which will also make businesses more internationally competitive. If this option is pursued, the transitional year would be shortened by more than three months and run from April 6 to the following December 31.
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