The Harry Potter star attempted to include two accounting periods in the same tax year – one for 12 months and another for eight months – both ending in 2009-10. This would have had the effect of stopping part of his income being taxed at the additional 50 pence rate.
Changing the length of an accounting period in this way could be legitimate, but requires certain conditions to be met in order for the change to take effect immediately for tax purposes. The First Tier Tribunal found that those conditions weren’t met in this case, and as a result the income was subject to the additional 50 pence rate.
The Tribunal confirmed that for a change of accounting date to be effective, the accounts must have been drawn up prior to the submission of his tax return.
Jennie Granger, Director General of Enforcement & Compliance, HMRC, said:
“The clear message with this case is that HMRC will not hesitate to go to court to protect long established tax rules. We are committed to ensuring that everyone - including the wealthy - pays their fair and legal share of tax.”