Talk:Fiscal year
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[edit] British tax year - Gregorian correction
This is an intriguing point. It is clearly an error to say that the difference is accounted for by the 11-day correction, as the difference between big dumby
25 March and 6 April is one of 12 days!
Worried me too.
[edit] The Inland
Revenue (as was) were no help in proving an answer.
The reason for the twelfth day has long been a puzzle to me, and it seems that there are two distinct possibilities:
1. The fact that there should have been a leap day in February 1752 (which became February 1753 under the Calendar Act) meant that an extra day was added to the 1752/3 tax year in order not to deprive either the Exchequer of tax which it had forecast for or the people of their contractual certainties. This would mean the year beginning on 25 March 1752 (OS) and ending on 5 April 1753 (NS), a total of 366 days despite the latter year (1753) not being a leap year. The problem with this is that there would previously have been an extra day as part of the unexpected leap year in 1751/2 which would not have arisen without the correction, yet this day was not denied. Hence it appears to work one way but not the other.
An interesting theory, but one which (I'm afraid) doesn't hold water. Note firstly that the Calendar Act Calendar Act states that 1 January becomes the start of the year with effect from 1752. The wording of the act is that the day after 31 December 1751 shall be 1 January 1752. This means that 1751 was a very short year, running from 25 March to 31 December. And, of course, 1752 was another short year, as it missed out the 11 days to achieve the transition from Julian to Gregorian calendar. Now, the next challenge is which years in the Julian Calendar were treated as leap years. The Royal Observatory Greenwich couldn't help here, merely telling me that every fourth year was a leap year. But I've recently found the House of Commons Journal on the web, which lets one examine proceedings in the House. Take a look at, for example, 29 Feb 1659. Athough the date is given at the top of the page as 29 February 1660, the transcript and the page image clearly state the date as 29 February 1659. So this is the date which we'd now express as 29 February 1659/60. And it's a Wednesday, which matches Samuel Pepys's diary entry for 29 February 1659/60. The latest date proceedings I've found for a leap year day in the House of Commons Journal is for 29 February 1667/8. 29 February 1667 So we can be sure that the leap years (in England and Wales at least) in the Julian Calendar were those in which the legal year number was one less than a integral multiple of 4. But, as the leap day in February was in that part of the year which we now consider to be in the following year, the effect is essentially the same as our current rule for leap years (except for the century years). I.e. 29 February 1667 in the Julian Calendar would be considered now to be in 1668 - which is an integral multiple of 4. Now, back the the 1750s. There would have been a leap year in 1747/8, the leap day being 29 Feb 1747/8. And if we come forward 4 years, then it would have been expected that 1751/2 would have been a leap year. But 1751 was cut short at 31 December, and 1752 started on 1 January. And 1752 is an integral multiple of 4, so it was a leap year. So 29 February 1752 was always going to be a leap day, irrespective of the changes brought about by the Calendar Act. So there's no missing leap day. One tax year would have run from 25 March 1751 (Julian) to 24 March 1752 (Julian but with new start of year) - and this is a leap year. The following tax year should perhaps have run from 25 March 1752 (Julian but with new start of year) to 4 April 1753 (24 March 1753 + 11 days), and then the next tax year start on 5 April 1753.
2. The last day of the tax year was indeed corrected to 4 April as this was the result of adding 11 days. Tax years then proceeded in this 5 April-4 April cycle until February 1800, when the status quo ante would have imposed a leap day but the Gregorian calendar did not. For those involved with such things as 50-year leases, the correction represented a change by depriving them of earning income on a non-existent 29 February 1800 which they would have anticipated, and conversely also allowed a day less in tax to be collected for the year 1799/00. Thus an extra day was added to compensate for this loss and the tax year finished a day later on 5 April. This situation has prevailed since. The question here is why this compensation was not also seen in 1900, when the same thing happened again. I can only presume that it was thought either of lesser relevance than before or simply inconvenient.
Comments on these two possibilities, or indeed any others, are welcome. My personal preference is for option 2, as 1 appears slightly contradictory. --Ross UK 23:18, 9 September 2005 (UTC)
- I've had another thought - perhaps both could be true? Then the previously non-leap tax year 1751/2 would end on 23 March 1752 (OS) and the previously leap tax year 1752/3 would end on 24 March (OS) [4 April (NS)], providing in both cases for the same length of years as would have been seen without the calendrial change. Then, in 1800, an additional day was added to make the end of the tax year 5 April (NS). There is however still the 1900 issue. --Ross UK 23:53, 10 September 2005 (UTC)
[edit] Fiscal year numbering convention
Is there a convention for the numbering of the fiscal year? That is, is fiscal year 07 a little ahead of, or behind, calendar year 07?
It appears that it is up to the company in question to decide what they call their FY.
I'd just like to point out that the "FY06" and "FY05-06" conventions aren't Y2100-compliant. —Traal 21:36, 8 March 2006 (UTC)
[edit] Does Accounting reference date merit merging into this article?
I came across Accounting reference date while wiki-surfing earlier today, and found it currently listed for AfD. I don't know if it should be deleted, kept, merged, or trans-wikied to Wiktionary. Do any of you editors think it could be meaningfully merged into this article? I think it would only require a small factoid, not a section, but it might merit either. What do y'all think? --Iamunknown 20:21, 1 October 2006 (UTC)
- No; An accounting reference date is (in the UK anyway) something that relates to the tax planning of a company and can be freely (within limits once first set) be chosen by the company. Whilst the company may internally refer to Financial Years based on that date, Financial Year in general relates to the Inland Revenue / government set annual April 6th-5th date. --AlisonW 22:17, 4 November 2007 (UTC)
- Ah .. I now see it has been done already. I might add something then as an Accounting date will usually (in the UK again) be chosen so as to *not* coincide with the tax year, but be offset from it so as to reduce tax liability. The amount by which this can be achieved was reduced a few years ago when we went from year-1 to current year taxation, but still exists. --AlisonW 22:19, 4 November 2007 (UTC)
