The Office of Tax Simplification (OTS) has put forward a proposal to move the end of the tax year from April 5 to March 31. There are also indications that December 31 was taken as the deadline for the move. We should be aware that any change in the tax year would necessarily have to take into account the complexity and cost of changing the payroll and payroll software.
The benefits of date changes include:
- Possibilities of simplification
- MTD reporting alignment
- Third-party pre-populations are easier to achieve with calendar months
- Cross-border transactions and the reporting and calculation of double taxes would be simpler with the calendar end of the year in line with most of the rest of the world.
- Reduced administration for both companies and individuals
- Assistance in digitalization of the economy and the tax system
There are many opinions that these changes will be economically expensive because all systems will change and will take a long time so we should avoid unnecessary changes right now.
For more details please check https://www.gov.uk/government/publications/ots-to-explore-potential-for-moving-the-end-of-the-tax-year