If you’re a business owner or sole trader in the UK, one of the most important dates to keep in your calendar is 6 April, the start of the financial year.
The financial year runs until 5 April and is often referred to as the fiscal year or tax year.
For business owners, understanding key dates and changes can help you manage your finances, keep your costs under control and avoid any unpleasant surprises.
While businesses are allowed to set their own financial years, they must still meet HMRC and Companies House reporting deadlines.
This can be challenging for businesses or sole traders that are used to other deadlines, as different countries follow different fiscal calendars. For instance, the US financial year begins on October 1, while many European countries stick to the calendar year.
Why isn’t the financial year the same as the calendar year in the UK?
The reason for this can be traced back to the mid 18th century, when Britain was still using the inaccurate Roman Julian Calendar. By 1752, this was 11 days behind the Gregorian Calendar that many other European countries were already using.
Because the beginning of the financial year fell on 25 March in other European countries, the UK government decided to move the new financial year to 5 April to avoid losing any tax revenue for that year. This date moved to 6 April by 1800 but has stayed the same ever since.
What the new financial year means for businesses
Every year, you will need to submit information about your business activities to HMRC and/or Companies House.
- If you’re a business owner, you will need to prepare your annual financial statements and send your company tax return within 12 months of the end of your accounting period.
- You must also pay any tax you owe within nine months and a day of the end of the accounting period.
For people using a self-assessment, such as sole traders, this deadline for submitting your tax return is always 31 January in the year after the tax year you are reporting.
- So, this is 31 January 2026 for when submitting a tax return for the current tax year (2024-25), paying any outstanding tax for that tax year and making your first payment on account where required for the 2025-2026 tax year.
- Fortunately, the tax return is usually the only important document sole traders need to send during the financial year.
When the new financial year begins, new fiscal measures, such as changes to tax rates, usually take effect, which can have a significant impact on your business.
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Therefore, it’s important to keep up to date with any changes revealed in the 2024 Autumn Budget and the Spring Statement on 26 March.
Incoming changes for the new tax year
Here’s what we know so far about the 2025-2026 financial year – though, it’s important to note that new fiscal measures and tax policies may be announced during the Spring Statement on 26 March 2025.
The National Living Wage will increase. This will rise to £12.21 per hour, up 6.7 per cent from £11.44 per hour in the 2024-2025 tax year. This is the minimum hourly rate of pay for UK employees aged 21 and above.
The National Minimum Wage will rise by 18 per cent. This will be £10 per hour for workers aged 18-20 (up from £8.40 in 2024-2025).
It will rise to £7.55 per hour (up from £6.40) for:
- Workers under 18 but above compulsory school-leaving age
- Apprentices aged under 19
- Apprentices aged 19 or over in the first year of their apprenticeship
There will be higher Employers’ National Insurance contributions. From 6 April, Employers’ National Insurance will rise to 15 per cent (up from 13.8 per cent in the 2024-2025 financial year). The threshold at which employers have to pay this will also fall from £9,100 to £5,000 per year.
Statutory pay rates will rise. New rates will apply for statutory maternity, paternity and sick pay, as well as other statutory parental and sick pay.
There will be changes to business rates relief. While there will be an extension to business rates relief for businesses in the retail, hospitality and leisure sectors, the discount will fall from 75 per cent to 40 per cent, which means rates bills for some businesses in England could almost double.
Three reasons to plan ahead for the 2025-2026 tax year:
It’s vital for businesses to have a solid financial plan in place for the coming year. Here are three things owners can do now – and further key dates ahead to be aware of.
Review your payroll budgets. For example, make sure you can accommodate the increase in Employers’ National Insurance contributions and the National Living Wage or National Minimum Wage increases.
Make sure you’re claiming all the tax relief you’re entitled to. Small and Medium Sized Enterprises (SMEs) in the UK are losing out on an estimated £47bn in potential tax relief for Research and Development.
Stay compliant with new legislation and regulations. Avoid penalties and minimise any disruption to your business.
Here are the key dates to mark in your calendar if you’re a business owner or sole trader, after 5 April as the final day of the 2024-2025 financial year:
- 6 April 2025: First day of the 2025-2026 financial year
- 31 July 2025: Second payment on account due for the 2024-2025 tax year (self assessment)
- 31 January 2026: Deadline for online tax returns for people using self-assessment and individuals in Limited Liability Partnerships (you must also pay your outstanding tax bill for the 2024-2025 tax year and first payment on account for the 2025-2026 tax year by this date)
- Nine months after your company’s financial year ends: submit your annual accounts to Companies House
- Nine months and one day after your company’s financial year ends – pay your corporation tax
- 12 months after incorporation: submit your confirmation statement to Companies House
- Nine months after your company’s financial year ends: submit dormant accounts if your company is not actively trading
For the latest updates on employer rates and thresholds for 2025-2026, check this GOV.UK page, or speak to a financial adviser.
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Source: independent.co.uk
