Tax year

Definition

The tax year for individuals in the UK runs from 6 April to 5 April the following year. Companies instead use their own accounting period for corporation tax, which need not align with it.

In plain terms

For personal tax — including a director's Self Assessment — the year is the odd 6 April to 5 April span. A company's tax life follows its own financial year instead.

Why it matters for your company

Directors juggle two clocks: their personal tax year and the company's accounting period. Keeping the two straight avoids missed deadlines and helps plan dividends and pay across the right periods.

In practice for a limited company

For a small UK limited company, the tax year mostly shapes the director's own paperwork rather than the company's. A director drawing a mix of salary and dividends needs to track personal income against the 6 April to 5 April window for Self Assessment, while the company's own reporting follows its accounting period regardless of where that sits in the calendar. The two rarely line up, which is exactly the point to hold onto.

In practice this means a director might be closing out a company year-end in one month and preparing a personal return for a completely different span a few months later. Diaries, reminders, or an accountant's calendar that track both dates separately tend to work better than trying to merge them into a single mental deadline.

Common pitfalls

The most common slip is directors assuming the company's accounting period and their personal tax year are the same thing, then missing a Self Assessment deadline because attention was on the company's year-end instead. Another is timing dividend decisions without reference to which personal tax year they will fall into, which can complicate later planning around the dividends versus salary choice.

A less obvious pitfall is treating the tax year as fixed guidance for cash flow planning generally. It governs personal tax reporting, not when a company's own obligations or working-capital needs arise — those follow the business's own rhythm, not the calendar directors use for their personal returns.