The taxpayer failed to meet all the criteria for a valid change of accounting date, because he did not have accounts with an accounting period no longer than 18 months to the new accounting date at the time he notified the change.
The appellant had an annual accounting date of 31 July. In 2009/10, he decided on advice to change his accounting date to 5 April, and so bring into account in that tax year income earned in the period 1 August 2008 to 5 April 2010 (i.e. a 20 month, rather than a 12 month, basis period in 2009/10).
It was advantageous to bring forward the appellant’s liability to tax on eight months’ income (which, if he had not changed accounting date, would have been subject to tax in 2010/11), because a new top rate of 50% took effect in 2010/11, whereas 2009/10 was the last year where the top rate remained at 40%. Therefore, if the change in accounting date was effective, this would result in
