This week's opinion: 13 February 2025

Too impractical to change the tax year end

Many readers will have seen the CIOT press release suggesting that the government considers moving away from the existing 5 April tax year to a calendar year basis. Many people will agree with the principle. The CIOT points out that most jurisdictions operate on a calendar year basis and there can be a mismatch where a UK taxpayer receives income from overseas investments reported on a 31 December basis and had to allocate the income across two UK tax years. We’ve been here before several times. The Office for Tax Simplification looked at the options a few years ago but no action was taken (see tinyurl.com/otstaxyearendrep).

This is a classic instance of a stranger asking a local for directions only to be told ‘I wouldn’t start from here if I were you’. Somebody designing a tax system from scratch...