Barristers accounts

Barristers accounts

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I have a potential client interest from a barrister. My first one. Is there any specialised knowledge needed to take on this work? 

Thanks. 

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By User deleted
17th Jun 2015 13:59

No

(depending of course on what you mean by 'specialised').

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By Banzai
17th Jun 2015 14:15

Cash basis

I have done a bit of tax work for Barristers and there are a few quirks but really nothing that out of the ordinary except prior to 2013/14 they were entitled to use the cash basis in their early years and you then had a 10 year adjustment when that entitlement ended.

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Glenn Martin
By Glenn Martin
17th Jun 2015 14:33

Not really

Can be very high earners and if supported by a good clerk in a modern chambers records should be of decent standard. If you can get into a chambers you may well get other Barristers join you.

Someone who is that intelligent in one field can be eccentric in others.

I have seen Barristers who are scared to open post from HMRC and they can be appalling at managing their own money, ie earning £150k per year but spending £200k.

Despite charging £500 per hour whilst in court they can also have funny ideas about what your fees should be.

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By User deleted
17th Jun 2015 14:43

Echo every one of Glennzy's points

But especially the 2nd and 4th.

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By Poindexter316
17th Jun 2015 15:10

"old cash basis" may still apply

I agree with Banzai, a few quirks, primarily 

1 rules on use of the old cash basis can still apply as there was a 7 year period of continuance after the new rules were introduced (2013).

2 Need to consider what basis will apply after expiry of "old rules" or whether/when to move before end of maximum period noted at 1 above.

3 New cash basis (if adopted) limits use of losses and has various limits that need to be met to participate

4 watch calculation of class 4 NIC on the transition between regimes

Otherwise "standard" stuff.

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By Duncan Cameron
17th Jun 2015 17:54

Other points

You need to fully understand how the barrister's chambers are organised. It could be simply a cost sharing arrangement or a trade protection organisation or the chambers could be an entity in its own right (eg a limited company). The VAT consequences differ and thus the method of arriving at the net of VAT expenses in the accounts will differ.

For VAT there is a special cash basis for barristers.

You will need to understand how UITF5 applies to barristers’ fees, especially for work done on a contingent fee basis. The Bar Council has published a note on this. Google “UITF 5 Bar Council”.

You may need to understand what happens when work is shared and how devilling fees are treated.

The Bar Council also publishes a handbook –Taxation and Retirement Benefits in Guidance. Googling for this should enable you to read the 2012 edition. You may have to buy the current edition.

Barristers are now allowed to practice via limited companies and so incorporation needs to be considered.

A successful barrister who was called to the bar in the days of the preceding year basis of assessment and has an early-in-the-tax-year accounting date could have a very large overlap relief entitlement. If not incorporating consider change of accounting date to cash in this relief whilst there is 40%/45% income to be covered.

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