Whether you’re training to become a barrister or already in practice, managing your tax returns and ensuring your tax bill is accurate can feel overwhelming. In this blog, we’ll explore whether hiring an accountant is the right choice for you, and outline the types of expenses you may be able to claim as a barrister.

Do barristers need a specialist accountant?

It’s not actually a legal requirement to hire an accountant if you’re a barrister but it is advised. Barristers often have unique financial arrangements which can be difficult to translate into a tax return.

An accountant will also make sure you don’t miss out on claiming specific tax deductions you’re entitled to, such as chamber fees, wig and gown replacements, bar library subscriptions, and practicing certificate fees.

Are barristers self-employed in the UK?

Most barristers in England and Wales work for themselves rather than being employees, but although they’re self-employed they usually ‘belong’ to chambers.

Chambers are a shared office or set of rooms that enable self-employed barristers to share administrative staff and office costs. They shouldn’t be confused with legal firms – each member is self-employed and acts as a ‘tenant’ or ‘member’ to the chambers.

That doesn’t mean to say all barristers are self-employed – there are some who are employed by organisations (such as companies or government bodies).

Can a barrister form a limited company?

Although uncommon – yes barristers can form a limited company. Some barristers do it for tax-efficiency, particularly those who earn over £150,000 because they can leave profits within their company at 19% Corporation Tax and pay themselves a salary and dividends more gradually (i.e., you’re not obliged to take it all out at once, and incur a big lump of personal tax).

There are pros and cons to operating as a limited company – so it’s advised you speak with an accountant first before making any decisions.

It’s important to get approval from your chambers before you decide to register – the chambers’ constitution may need updating in order to admit a corporate entity.

What taxes do barristers need to pay?

The type of tax returns you need to submit depends on the legal business structure you use to register as a self-employed barrister. Most barristers are sole traders, meaning they’ll pay income tax and National Insurance contributions on their profits, but it all depends on what is the most appropriate structure for your needs.

Cash basis accounting for tax purposes

As we’re talking about tax, it’s worth mentioning that lots of barristers use ‘cash basis’ accounting. This means you only pay tax on transactions which have happened, not those you expect to happen.

For example, if you send an invoice and use the ‘accruals’ basis of accounting, you’ll pay tax on the profit you make from that invoice, even if the client has not paid you. Using the cash basis method means you won’t need to pay tax on the invoice unless your client has paid you. This can help you manage your cash flow against your tax bill more effectively – particularly during longer cases where it might take time to see payment.

Cash basis accounting only applies to unincorporated businesses though – if you opt to be a limited company, you’ll pay Corporation Tax on your profits using the accruals method.

Are barristers affected by Making Tax Digital?

Possibly. Anyone operating as a self-employed sole trader (or with income from property) might be affected by Making Tax Digital for Income Tax depending on how much they earn.

What are allowable expenses for barristers?

Allowable expenses are any costs incurred ‘wholly and exclusively’ for business purposes. Barristers will typically claim for things like:

• Professional fees: Bar Council fees, practicing certificate fees, accounting and legal fees etc
• Chamber costs: Including rent, service charges, and clerk commissions
• Travel: Travel to court or to clients, but not your regular commute to your chambers
• Office supplies: Think stationery, phone bills, internet, computer software etc.
• Books and subscriptions: For example, law reports, journals and textbooks
• Training: CPD training or any course that helps you perform at your job
• Staff fees: E.g., salaries if you have a secretary or an assistant, and your own wages if you operate as a limited company and take a salary
• Clothing: For example, wigs, gowns, collars, and bands required for court

If you’re ever unsure what you can and can’t claim, speak with an accountant to ensure you don’t miss out.

Can an accountant help reduce my tax bill as a barrister?

Yes, an accountant can add real value to your business. They’ll help you identify all allowable expenses, optimise your pension contributions, and manage irregular income more effectively. You’ll also get tailored advice on key decisions, such as when to register for VAT and whether switching your business structure could improve your tax efficiency.

Being a barrister and handling tax can be complex, but an experienced accountant should make the process easier for you.

Accounting software for barristers

Good software which is MTD compliant and capable of handling the unique complexities of a self-employed legal professional will be useful. An accountant should be able to guide you on this, with some accounting firms offering accounting software as part of their package.

 
Find out how our online accounting services can help your business by talking to one of the team on 020 3355 4047, or get an instant online quote.