The taxpayer failed to meet all the criteria for a valid change of accounting date because the accounts of the business were for a 20-month period, and therefore the ‘18-month test’ condition was not satisfied.  

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). This would have been to his advantage because a new higher rate of tax was introduced for the following tax year. 

However, HM Revenue and Customs (HMRC) did not accept that the appellant had effected a change in his accounting date. The dispute concerned whether or not the conditions (in ITTOIA 2005, s 217) for a valid change of