As promised on twitter here is the list of tax tips for barristers from Silver Levene.
This isn’t a sponsored post, I had a meeting with Silver Levene myself (as I met them at the Pupillage Fair last year) and during my meeting we got talking about my blog and how I wanted to share with you all some top tips for those who have just started at the Bar, just about to start, or those considering a career at the Bar.
I also then had the pleasure of being sat on a Panel at the Pupillage Fair by Target Jobs this March to chat about studying the BPTC and life as a Barrister – they definitely know their stuff, so do get in touch, whatever stage you are at!
Do check out their website above and get in touch if you need any more information from them!
Top 10 tax tips when commencing at the Bar
Your pupillage award received during your 1st six are not taxable, the 2nd six is taxable. Try and arrange for your award to be weighted so that you receive a higher proportion of the award during your 1st six pupillage.
This will ensure that expenses are not missed and will help reduce your tax liability. This will also substantiate any business expenses in the unfortunate event of an HMRC enquiry.
Make sure you don’t miss the threshold to register for VAT
Registration for VAT is compulsory when your fees received exceed £82,000. You must register prior to exceeding this threshold.
Ensure you register for self-assessment
As a self-employed Barrister you need to register for self-assessment. You are deemed to commence trading at the start of your 2nd six pupillage.
Choose the correct accounting year end. 30th April is generally advantageous
By extending your first period of account by slightly longer than a year, you can obtain a significant ongoing cash flow advantage throughout the course of your career. This will delay when you pay tax on your profits.
Keep receipts for business expenses incurred during your Pupillage
When you register for VAT, you can reclaim the VAT on capital expenditure including laptops, home office desk, chair, wig and gown that you purchased up to 4 years before you registered for VAT. These capital items can also be claimed in your account to reduce your income tax.
Download the Silver Levene App
This has lots of useful functions; a receipt management tool, mileage tracker and tax calculators to assist you.
Saving for Tax
You must put money aside for tax while you earn it. The golden rule is at least 25% of your fees received (excl. VAT) in the first year.
Do not file your Tax Return or VAT returns late
This will incur penalties, interest and surcharges and may trigger an HMRC enquiry.
Appoint a specialist Barrister Accountant
With over 30 years of experience, Silver Levene’s specialist Barrister unit acts for over 1500 Barristers, we also prepare the first year accounts and tax return for free.