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A fiscal year (or financial year, or sometimes budget year) is a period used for calculating annual (“yearly”) financial statements in businesses and other organizations. In many jurisdictions, regulatory laws regarding accounting and taxation require such reports once per twelve months, but do not require that the period reported on constitutes a calendar year (i.e., January through December). Fiscal years vary between businesses and countries.
In addition, many companies find that it is convenient for purposes of comparison and for accurate stock taking to always end their fiscal year on the same day of the week, where local legislation permits. Thus some fiscal years will have 52 weeks and others 53. Major corporations that adopt this approach include Cisco Systems and Tesco.
In the United Kingdom, a number of major corporations that were once government owned, such as BT Group and the National Grid, continue to use the government’s financial year, which ends on the last day of March, as they have found no reason to change since privatisation.
Nevertheless, the fiscal year is identical to the calendar year for about 65% of publicly traded companies in the United States and for a majority of large corporations in the UK and elsewhere (with notable exceptions Australia, New Zealand and Japan).
Many universities have a fiscal year which ends during the summer, both to align the fiscal year with the school year, and because the school is normally less busy during the summer months.
Some media/communication based organizations use a Broadcast calendar as the basis for their fiscal year.
In the United Kingdom the fiscal year for the purposes of personal taxation and payment of state benefits runs from April 6 to April 5. However the year should run from April 1 to March 31 for the purposes of corporation tax and government financial statements.
Although United Kingdom corporation tax is charged by reference to the government’s financial year, companies can adopt any year as their accounting year: if there is a change in tax rate, the taxable profit is apportioned to financial years on a time basis.
The April 5 year end for personal tax and benefits reflects the old ecclesiastical calendar, with New Year falling on March 25 (Lady Day), the difference being accounted for by the eleven days “missed out” when Great Britain converted from the Julian Calendar to the Gregorian Calendar in 1752 (the British tax authorities, and landlords were unwilling to lose 11 days of tax and rent revenue, so under provision 6 (Times of Payment of Rents, Annuities, &c.) of the Calendar (New Style) Act 1750, the 1752–3 tax year was extended by 11 days). From 1753 until 1799, the tax year in Great Britain began on April 5, which was the “old style” new year of March 25. A 12th skipped Julian leap day in 1800 changed its start to April 6. It was not changed when a 13th Julian leap day was skipped in 1900, so the personal tax year in the United Kingdom is still April 6.