Our_ top_ tips_ for_ starting_ at_ the_ Bar
It can be a time of mixed emotions: excitement and anticipation, tinged with apprehension and the overriding sense that there’s still so much to learn. One thing is certain: you’ll want your finances to be stable and secure now and in the future. Here are our top tax tips to help you make the best possible start.
Weight your award
Your pupillage award for your 1st six isn’t taxed, but the award for your 2nd six is. Try to receive the bulk of your award during your 1st six, to reduce your tax.
This helps ensure you claim all your expenses and pay less tax. Receipts are also vital proof if you’re unlucky enough to have an HMRC enquiry.
You’ll also see the value of keeping receipts when you register for VAT. You can reclaim VAT on capital expenditure made up to four years before registering. This includes items such as laptops, home office desk, chair, wig and gown. As well as reducing your VAT payment, claiming for these capital items will reduce your income tax.
Register on time
You’ll become a self-employed Barrister when you start your 2nd six pupillage, at which point you’ll need to register for self-assessment.
The VAT threshold is £83,000, so you must register for VAT before your fees received exceed this level.
Choose the right accounting year end
If you make your first accounting period slightly longer than a year, you’ll delay paying tax on your profits and gain a significant cashflow advantage throughout your career. 30th April is generally a good date for your year end.
Put money aside for tax
As you receive fees, put a portion aside ready to pay your tax. We suggest at least 25% of your fee income (excluding VAT) in your first year.
Hit the deadlines
Make sure you submit your Tax Return or VAT return on time, to avoid penalties, interest, charges or even an HMRC enquiry.
Use the app
Download the Silver Levene app. It has lots of useful functions, including receipt management, mileage tracker and tax calculators.
Appoint a specialist
With over 30 years’ experience, our specialist Barrister team acts for more than 1600 Barristers. We’ll also prepare your first year accounts and tax return free! So email Mason Bloom or Peter Grossmark or call us on 0207 383 3200.