What is a fiscal year?

Published Wednesday 17 June 2026

Table of contents

• What is a fiscal year?
• Fiscal year vs calendar year vs financial year
• When does the UK fiscal year start and end?
• Why does the UK tax year start in April?
• Why your fiscal year matters
• How to choose your fiscal year
• Key dates and deadlines in the UK tax year
• Simplify your year-end reporting with Xero
• FAQs on fiscal year

Key takeaways

• A fiscal year is the 12-month period your business uses for accounting, tax reporting and financial planning.
• The UK tax year runs from 6 April to 5 April, but your company's fiscal year can start on a different date.
• Choosing the right fiscal year helps you align reporting with your business cycle and stay on top of HMRC deadlines.
• Key tax deadlines fall throughout the year, from P60s in May to Self Assessment payments in January.

What is a fiscal year?

A fiscal year is a 12-month period that a business, government or organisation uses for accounting and tax purposes. It sets the timeframe for tracking income, expenses and financial performance.

Your fiscal year doesn't have to match the calendar year. Many UK businesses choose a fiscal year that runs from 1 April to 31 March, while others pick a date that suits their industry or trading patterns. The fiscal year is sometimes called a financial year, and both terms mean the same thing in practice.

Fiscal years are typically named by their end year. For example, a fiscal year running from 1 April 2025 to 31 March 2026 would be referred to as FY26.

Fiscal year vs calendar year vs financial year

These terms are closely related but have distinct meanings. Understanding the differences helps you stay on track with your reporting obligations.

• Calendar year: runs from 1 January to 31 December. Some businesses use this as their accounting period, but it's not mandatory in the UK.
• Fiscal year: any 12-month period a business or government chooses for financial reporting. Your company's fiscal year is set by its accounting reference date.
• Financial year: in the UK, this is used interchangeably with fiscal year. It refers to the same 12-month accounting period.
• Tax year: the specific period set by HMRC for personal tax purposes, running from 6 April to 5 April. This applies to income tax, National Insurance and Self Assessment.

The key distinction is that you can choose your company's fiscal year, but the tax year is fixed by HMRC. Your Self Assessment and payroll obligations follow the tax year, while your company accounts follow your chosen fiscal year.

When does the UK fiscal year start and end?

The answer depends on whether you're talking about the government's tax year or your company's accounting period. Both are important for staying compliant.

The UK tax year starts on 6 April and ends on 5 April the following year. The current tax year is 2026/27, running from 6 April 2026 to 5 April 2027. This is the period HMRC uses for income tax, National Insurance contributions and Self Assessment. You can find more detail in the Xero tax year guide.

Your company's fiscal year, however, can start on any date. When you register a limited company with Companies House, your accounting reference date is set to the last day of the month in which you incorporated. For example, if you incorporated on 15 September, your accounting reference date would be 30 September.

You can change your company's accounting reference date by applying to Companies House. Your accounting period can't exceed 12 months, though your first set of accounts may cover a longer period of up to 18 months.

Why does the UK tax year start in April?

The UK's unusual tax year start date has a surprisingly old origin. It goes back to a calendar change nearly 300 years ago.

Before 1752, Britain used the Julian calendar, and the tax year began on 25 March (Lady Day, the traditional start of the legal year). When the country switched to the Gregorian calendar in September 1752, 11 days were dropped to bring Britain in line with the rest of Europe.

The Treasury refused to lose 11 days of tax revenue, so the start of the tax year was pushed forward to 5 April. In 1800, a further adjustment moved it to 6 April, where it has remained ever since.

Why your fiscal year matters

Your fiscal year isn't just a formality. It affects how you manage, report and plan your business finances throughout the year.

• Financial reporting: your fiscal year determines when you prepare annual accounts, financial statements and balance sheets.
• Tax compliance: filing deadlines for Corporation Tax, VAT returns and Self Assessment all hinge on your fiscal year or the HMRC tax year.
• Budget planning: setting budgets and forecasts around your fiscal year helps you allocate resources and manage cash flow more effectively.
• Performance tracking: comparing results year-on-year is only meaningful when you're measuring the same 12-month period each time.
• Seasonal alignment: if your business has busy and quiet periods, aligning your fiscal year with those cycles gives you a clearer picture of annual performance.

Getting your fiscal year right from the start saves you time and reduces the risk of missed deadlines or messy reporting.

How to choose your fiscal year

Choosing the right fiscal year can make your accounting simpler and your financial reports more useful. Here are the main factors to consider.

• Revenue cycle: if your business earns most of its income in a particular season, ending your fiscal year after that peak gives you a complete picture of your busiest period.
• Industry norms: some sectors have standard fiscal years. Aligning with your industry makes benchmarking easier.
• Tax reporting: a fiscal year that aligns closely with the HMRC tax year (ending around April or March) can simplify your personal and business tax planning.
• Cash flow: avoid ending your fiscal year during a period when cash is tight, as year-end accounting and tax payments can add extra costs.

Your first set of company accounts may cover a period longer than 12 months, depending on when you incorporated. After that, your accounting period must be 12 months or shorter.

If you need to change your fiscal year later, you can apply to Companies House to adjust your accounting reference date. You can shorten your accounting period as often as you like, but you can only extend it once every 5 years unless you have special reasons approved by Companies House.

Key dates and deadlines in the UK tax year

Staying on top of HMRC deadlines helps you avoid penalties and keep your finances in order. Here are the key dates to mark in your calendar for the 2026/27 tax year. For a full breakdown, see the Xero end of financial year resource.

• 6 April 2026: start of the new tax year.
• 5 April 2027: end of the tax year.
• 31 May 2027: deadline for employers to issue P60s to employees.
• 6 July 2027: deadline for submitting P11D forms for employee benefits and expenses.
• 5 October 2027: deadline to register for Self Assessment if you're newly self-employed or have untaxed income.
• 31 October 2027: deadline for paper Self Assessment tax returns.
• 31 January 2028: deadline for online Self Assessment tax returns and payment of any tax owed.

Missing these deadlines can result in automatic penalties and interest charges. If you're registered for Making Tax Digital (MTD) for VAT, you'll also need to submit quarterly VAT returns through compatible software. MTD for Income Tax Self Assessment is being phased in from April 2026 for sole traders and landlords with qualifying income over £50,000.

Simplify your year-end reporting with Xero

Managing your fiscal year doesn't have to be stressful. With the right tools, you can stay organised, hit every deadline and spend less time on admin.

Xero's cloud-based accounting software keeps your financial data up to date in real time. Bank feeds pull in transactions automatically, helping you reconcile faster. Customisable reports let you track performance across any period, and you can share everything with your accountant or bookkeeper instantly.

Whether you're preparing year-end accounts, filing VAT returns or tracking expenses against your budget, Xero gives you a clear view of your finances whenever you need it. Get one month free.

FAQs on fiscal year

Here are answers to frequently asked questions about fiscal years.

What is the difference between a fiscal year and a tax year?

A fiscal year is any 12-month period your business chooses for accounting purposes, while the UK tax year is the fixed period from 6 April to 5 April set by HMRC. Your company's fiscal year and the tax year may overlap but often don't match exactly.

Can I change my company's fiscal year?

Yes, you can change your accounting reference date by filing a form with Companies House. You can shorten your accounting period at any time, but extensions are limited to once every 5 years unless you have an approved reason.

What happens if I miss a tax year deadline?

HMRC charges automatic penalties for late filing and late payment. For example, a Self Assessment return filed even 1 day late incurs an immediate £100 penalty, with further charges building up over time.

Do all businesses have to use the same fiscal year?

No. Each business can choose its own fiscal year based on its incorporation date or preference. Sole traders typically report based on the HMRC tax year (6 April to 5 April), while limited companies set their own accounting reference date.

What are fiscal quarters?

Fiscal quarters divide your fiscal year into 4 equal periods of roughly 3 months each. They're useful for setting targets, reviewing performance and submitting quarterly VAT returns under Making Tax Digital.