When does the new tax year start and end?

Rishi Sunak may have to break income tax promise says expert

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To be compliant with tax legislation, the start and end of a tax year is an important date for businesses and people who are self-employed. However, the start of a new tax year signals a number of changes for other people who do not run their own businesses too. While the typical year begins on January 1 and ends on December 31, the tax year runs on different dates.

When does the new tax year start?

The new tax year has now begun, as it started on Tuesday, April 6, 2021.

The 2021 to 2022 tax year will end on Tuesday, April 5, 2022.

For self-employed people, there are certain deadlines which need to be met over the course of the tax year.

People who are self-employed or sole traders must register for Self Assessment by October 5, 2021.

People must file their paper tax returns by midnight on October 31, 2021, but the deadline to file online tax returns is midnight on January 31, 2022.

The deadline to pay any tax owed for the previous tax year is January 31, 2022.

The second payment on account is due on July 31, 2022.

What does the start of a new tax year mean?

As well as being important for businesses and people who are self-employed, the start of the new tax year also has implications for other people.

For people who have Individual Savings Accounts (ISAs), the new tax year sees ISA limits refresh.

The maximum amount people can save in ISAs for the 2021 to 2022 tax year is £20,000.

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People who have a Lifetime ISA have a savings limit of £4,000 per year, which is topped up by a 25 percent Government bonus.

Lifetime ISA holders will also see their limit refresh at the start of the new tax year.

In line with the triple lock guarantee, the State Pension will increase from the week beginning April 12, 2021.

The start of the new tax year will also see a number of Government benefits rise slightly, which is good news for claimants.

This new tax year has also signalled the start of changes to the IR35 working rules, which were delayed in 2020 due to the pandemic.

The changes are being introduced by the Government, to make sure contractors and the companies who hire them are paying fairer amounts of tax and National Insurance contributions.

Qdos CEO, Seb Maley, described the introduction of changes to IR35 on April 6 as a “historic moment”.

He said: “The introduction of IR35 reform is a historic moment. It marks the culmination of years of the Government chipping away at contractors, who have shown tremendous resilience and a determination to continue working this way.

“But while reform poses challenges to contractors and the businesses who rely on them, I am confident that contracting will survive.

“In recent months the tide has turned, with thousands of businesses now aware of the fact that IR35 reform is manageable.

“These firms, who have prioritised compliant IR35 status decisions and will continue engaging contractors, are set to gain a huge advantage over those who have banned contractors because of the changes – a short-sighted and totally needless decision.

“Despite IR35 reform and the problems the changes create, I am optimistic about the future of contracting.

“The economic climate, the changing makeup of the workforce and the growing demand for flexible, skilled and cost efficient workers suggest contracting is here to stay in spite of these changes.”

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