Barrister:
How much should I put aside for taxes?
We cannot recommend strongly enough that you put away a proportion of your income on a regular basis to save up for your tax. You should transfer funds on a regular basis to a separate bank or building society account for this purpose.
It helps to know, of course, what proportion of your income you should put away. This can not be expressed accurately in general terms because the circumstances of every individual are different. As your income rises, the tax and national insurance bands change, personal tax allowances may be used up by other income and business expenses (including clerk's and chambers’ costs) are different for every barrister.
Once we have prepared your first set of accounts we can estimate with reasonable accuracy what your liability will be, and how much you should put aside to meet it. Until then, we recommend using a rule of thumb guide to transfer a proportion of your fees into a tax savings account. This tax savings account should be used to accumulate funds for the payment of your income tax, national insurance and VAT liabilities as they fall due. We can suggest a suitable percentage that you can apply to your fees, which is appropriate to your personal circumstances.
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Where next?
Within Pupil barrister…- Registering for tax & NIC
- Registering for VAT
- Opening a bank account
- Setting up your accounting records
- To what date do I prepare accounts?
- Will my pupillage awards be taxed?
- How can I borrow tax efficiently?
- When do I pay my tax?
- My first VAT return is due. Can you help?
- Which expenses can I claim against tax?
- Do I need to maintain a mileage log?
- Do I get full tax relief for my car and computer?
- Can I claim tax relief on my court clothing?
- Am I taxed on my receipts or my earnings?
- I have no history of earnings: how can I get a mortgage?
Within Barrister…
General…
