When Does the Tax Year End? 2026 Deadlines You Must Know
The UK personal tax year runs from 6 April to 5 April. We are currently in the 2026/27 tax year, which started on 6 April 2026 and ends at midnight on 5 April 2027, the deadline to use allowances such as the £20,000 ISA limit, the £3,000 Capital Gains Tax exemption, and pension contributions before the 2027/28 tax year begins on 6 April 2027.
Key takeaways
- The 2026/27 tax year ends at midnight on 5 April 2027; the next tax year, 2027/28, begins on 6 April 2027 and runs to 5 April 2028.
- The Personal Allowance stays at £12,570, with the 40% rate starting at £50,270 and the 60% effective trap running from £100,000 to £125,140.
- Dividend tax rates rose on 6 April 2026 to 10.75% basic and 35.75% higher rate, though the £500 tax-free dividend allowance is unchanged.
- From 6 April 2027, the Cash ISA allowance drops to £12,000 for under-65s, so year-end ISA planning now needs to account for that shift too.
When does the tax year end?
The current tax year, 2026/27, ends at midnight on 5 April 2027. This date serves as the hard cutoff for personal income tax, National Insurance contributions, and statutory capital gains exemptions.
Any financial activity occurring after this moment falls into the subsequent tax year, 2027/28, which begins on 6 April 2027 and concludes on 5 April 2028.
The Midnight Cutoff Rule
The cutoff between tax years is absolute, leaving no margin for error with midnight filings. For digital transactions, the timestamp of the payment usually dictates the tax year it belongs to.
A common pattern seen in SME accounting involves directors attempting to issue last-minute dividends; if the dividend is not legally declared and available by the evening of 5 April, it cannot be backdated to the prior year.
From 6 April 2026, dividend tax rates rose to 10.75% for basic-rate taxpayers and 35.75% for higher-rate taxpayers (up from 8.75% and 33.75%), so a dividend paid a day either side of 5 April can now fall under two different rates as well as two different tax years.
Defining the UK Fiscal Year
The tax year, also known as the fiscal year or Year of Assessment, is the standard 12-month period used by HMRC to calculate personal liabilities.
Unlike the Gregorian calendar year, which runs from January to December, the UK tax year is specifically designed to track income, savings interest, and investment growth for tax purposes.
While it is a 12-month period, it technically spans 365 days (or 366 in a leap year). For payroll purposes, it is often broken down into 52 Tax Weeks or 12 Tax Months.
Occasionally, a Week 53 occurs if the pay date falls on 5 April, requiring special payroll adjustments to ensure the correct amount of National Insurance is deducted.
| Term | Period Covered | Primary Purpose |
| Tax Year | 6 April to 5 April | Personal Income Tax, NICs, CGT |
| Financial Year | 1 April to 31 March | Corporation Tax, Government Budgeting |
| Calendar Year | 1 January to 31 December | General business reporting / VAT |
Who introduced the tax year system and when
The UK’s specific tax year dates were not chosen at random; they are the result of a mid-18th-century calendar correction.
Before 1752, the legal year in England began on 25 March, known as Lady Day. When the British Empire transitioned from the Julian calendar to the Gregorian calendar to align with Europe, 11 days were removed from September 1752.
To ensure that the Treasury did not lose 11 days of tax revenue, the end of the tax year was moved from 25 March to 5 April. This adjustment was formalised by the Treasury under the reign of King George II.
Although the calendar was simplified for the public, the tax collectors maintained the old cycle length, creating the 6 April start date we still use today.
Who announces changes and reforms for the tax year
Major reforms to the tax system are announced by the Chancellor of the Exchequer. These announcements typically take place during the Budget Statement (or Spring Budget) and the Autumn Statement.
The Chancellor outlines changes to tax bands, National Insurance rates, and business reliefs. These fiscal updates often extend to vehicle expenses, where the introduction of new car tax rates 2025 requires business owners to recalibrate their fleet or benefit-in-kind costs.
In practice, while the Chancellor proposes the changes, they must be debated in Parliament and passed into law via the Finance Act.
For SMEs, these speeches are the primary signal for future financial planning. Beyond business rates, these statements often detail changes to wider social support, such as the Universal Credit £420 boost which can significantly alter a household’s net income for the coming year.
Can the tax system be changed in the middle of a tax year
It is a common misconception that tax rules are locked in on 6 April. While rare, the government has the authority to change tax rates mid-cycle.
This is usually achieved through the Provisional Collection of Taxes Act 1968, which allows the House of Commons to pass resolutions that take immediate effect before the full Finance Bill is formally enacted.
- Emergency Budgets: Usually follow a change in government or a major economic shock.
- National Insurance Shifts: Rates have historically been adjusted mid-year to address funding requirements.
- Regulatory Tweaks: Minor compliance rules or benefit-in-kind valuations can be updated via Statutory Instruments.
When reviewing decisions made during economic volatility, business owners should be aware that announced rates can sometimes be superseded by urgent legislative updates.
In times of economic shift, many business owners look for ways to maximise their personal cash flow, occasionally investigating specific eligibility criteria such as the Universal Credit loophole £1500 to ensure they are accessing all available support.
Important dates to remember during the tax year
From a practical compliance perspective, the critical dates extend well beyond 5 April. Success for an SME depends on meeting several secondary deadlines that occur after the year has technically closed.
| Date | Deadline |
|---|---|
| 6 April 2026 | Start of the 2026/27 tax year; update payroll software and tax codes |
| 31 May 2026 | Employers must issue P60s for 2025/26 to all employees |
| 6 July 2026 | Deadline for filing P11D forms for 2025/26 employee benefits and expenses |
| 19/22 July 2026 | Deadline for Class 1A NICs on 2025/26 benefits (post/electronic) |
| 5 October 2026 | Deadline to register for Self Assessment for 2025/26 if not already registered |
| 31 October 2026 | Paper Self Assessment deadline for 2025/26 |
| 31 January 2027 | Online Self Assessment filing and balancing payment deadline for 2025/26 |
| 1 April 2027 | Start of the new Financial Year for Corporation Tax purposes |
| 5 April 2027 | Midnight cutoff for all 2026/27 personal tax-saving contributions |
Required actions at the start and end of every tax year
Successfully moving from one tax year to the next is a balancing act: you must finalize the previous year’s obligations while correctly configuring your systems for the new cycle.
A common pattern among successful businesses is the Year-End Audit conducted in March to ensure no allowances are left on the table.
- Reconcile Director’s Loan Accounts: Ensure any loans from the company are repaid within nine months and one day of the company year-end to avoid Section 455 tax.
- Review Dividend Distributions: Maximise the current year’s dividend allowance before it is lost at midnight on 5 April.
- Update Payroll Records: Apply new tax codes provided by HMRC for all staff members effective from 6 April.
- Perform a Stocktake: If your business holds physical inventory, an accurate count on 31 March or 5 April is essential for calculating Cost of Goods Sold.
- Overpaid tax claims are not open-ended: HMRC allows claims going back four years from the end of the relevant tax year, so a claim for 2022/23 needs to be in by 5 April 2027.
- Verify Overpayments: During this reconciliation process, it is worth checking your previous year’s contributions; many taxpayers often ask do HMRC automatically refund overpaid tax, though in many cases, a manual claim via your return is safer.
- Maximise Pension Contributions: Use the Carry Forward rule if you haven’t used your full allowance from the previous three years, provided you do so before 5 April.
Avoiding the 60 Percent Tax Trap
As of 2026, the Personal Allowance Taper remains one of the most punitive aspects of the UK tax system.
For every £2 you earn over £100,000, you lose £1 of your tax-free Personal Allowance. This creates an effective tax rate of 60% on income between £100,000 and £125,140.
When does the tax year end becomes a critical question for high-earning directors because the only way to cure this trap is to lower your adjusted net income before 5 April.
By making a personal pension contribution or a Gift Aid donation, you can pull your income back below the £100,000 threshold, effectively earning a 60% return through tax relief.
For example, a consultant contributing £10,000 to their pension shortly before 5 April could effectively save £6,000 in tax by reclaiming their full Personal Allowance.
Marriage Allowance and Capital Gains Planning
Another often-overlooked year-end action is the Marriage Allowance. If one partner earns less than the Personal Allowance, they can transfer £1,260 of their allowance to their higher-earning spouse.
This can be backdated up to four years, but the window for the oldest year closes on 5 April.
Directors and higher earners planning ISA contributions before 5 April should also note a change on the horizon: from 6 April 2027, the £20,000 total ISA allowance stays the same, but the amount of it that can go into a Cash ISA is being cut to £12,000 for savers under 65 (savers 65 and over keep the full £20,000 Cash ISA allowance).
The remaining £8,000 will need to go into a Stocks & Shares ISA or Innovative Finance ISA to use the full allowance. It doesn’t affect 2026/27 contributions, but it’s a reason to review ISA strategy at this year-end rather than next.
Similarly, the Capital Gains Tax (CGT) annual exempt amount is a use it or lose it benefit; if you are planning to sell business assets or shares, ensure the disposal is legally completed before the end of the tax year.
What Does the Tax Year End Mean for SME Owners and Operations?
For small and medium-sized enterprises, the 5 April tax year-end is a critical compliance and financial cutoff. It marks the final deadline for strategic tax planning—such as issuing dividends, reconciling director loans, and optimizing allowances—directly impacting corporate cash flow and liability.
- Dividend Timing: Dividends must be legally declared by 5 April to lock in rates and assign them to the correct tax year.
- Director’s Loans: Accounts must be reconciled promptly to avoid Section 455 tax penalties on outstanding balances.
- MTD Compliance: Systems and software must be updated to align with ongoing Making Tax Digital rollouts.
- Allowance Optimization: Business owners must utilize year-end exemptions and pension contributions before midnight to minimize personal tax exposure.
Conclusion
The 2026/27 tax year ends at midnight on 5 April 2027. Before then: confirm you’ve used the £20,000 ISA allowance and £3,000 CGT exemption, review dividend timing against the higher 2026/27 dividend tax rates, reconcile director’s loan accounts, and check whether Making Tax Digital now applies to you.
If you’re planning Cash ISA contributions for 2027/28, start factoring in the £12,000 Cash ISA sub-limit that lands on 6 April 2027.
Where a figure or deadline affects a meaningful sum, confirm the current position on GOV.UK or with an accountant before acting.
Disclaimer: This information is for educational purposes only and does not constitute professional financial or legal advice; please consult a qualified accountant.
FAQ
How much can I earn before I pay 40% tax in the UK?
You start paying the 40% higher rate once your total taxable income passes £50,270 for 2026/27 (£12,570 Personal Allowance plus the £37,700 basic rate band). Only income above that point is taxed at 40%, not your whole income.
Why does the British tax year end on April 5th?
It’s a legacy of the 1752 switch from the Julian to Gregorian calendar, when 11 days were dropped from the calendar. To avoid losing 11 days of tax revenue, the Treasury moved the old 25 March year-end to 5 April, where it has stayed ever since.
Does HMRC automatically refund overpaid tax?
Not always, it depends on how the overpayment arose. Some PAYE overpayments are refunded automatically, but many require a manual claim through Self Assessment, and all claims must be made within four years of the end of the relevant tax year.
When did the UK tax year end in 2026?
The 2025/26 tax year ended at midnight on 5 April 2026. We are now in the 2026/27 tax year, which runs to 5 April 2027.
What is the Cash ISA allowance from April 2027?
From 6 April 2027, savers under 65 can put a maximum of £12,000 of their £20,000 ISA allowance into a Cash ISA, with the rest needing to go into a Stocks & Shares or Innovative Finance ISA. Savers 65 and over keep the full £20,000 Cash ISA allowance.
Has Making Tax Digital for Income Tax already started?
Yes. It became mandatory on 6 April 2026 for sole traders and landlords with qualifying income above £50,000. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
