Media boutique Wiggin & Co has changed its tax year to escape paying the new 50 per cent tax rate for a year.
The London and Cheltenham-based firm has moved from an April year-end to 31 March, reporting a reduced turnover for the 2009-10 fiscal year partly as a result of the 11-month fiscal period.
Wiggin’s revenue was £10.8m for 2009-10, down from £14.1m the year before. The 16-partner firm also reported a £4.6m profit, a margin of 42.6 per cent and an average profit per equity partner of £401,000 for its 10 full-equity partners.
Wiggin partner Caroline Kean admitted that the firm had changed the tax year to avoid paying the higher rate for 12 months. She added that the move was also aimed at aligning the firm’s financial reporting period closer to the tax year.
“Under the old system we were always paying tax in arrears,” said Kean. “When profits are growing year-on-year that doesn’t really matter, but if there’s a dip in profit then partners may be paying tax in a tough year on a previous good year. We think it’s better to be paying in relation to the money you made in the most recent year.”