Barrister:
Opening a bank account
It is advisable to open a practice bank account, as distinct from your personal bank account, to enable you to keep your business finances separate from your personal finances. Your fees should be banked in your business bank account, and any payments, standing orders, or direct debits associated with your practice should be paid out of this account. You should make transfers from this account to your personal account to fund your personal spending.
You should consider internet banking. The speed and accessability may improve the control that you have over your finances.
As well as opening a main business account, we also recommend that you open a tax savings account, which should be interest bearing. It may actually be a building society account rather than a bank account.
We recommend that you make regular monthly transfers from your main business account to your tax savings account(s) to save for the payment of VAT, income tax and national insurance. We can advise you of the approximate amount that you should transfer each month.
The time delay between carrying out your professional work and being paid can be quite significant and varies depending on the type of work undertaken. In the short term it can be several months before your receipts build up sufficiently to meet your expenses. You may therefore need to approach your bank manager for short-term finance. We can introduce you to bank managers who understand the idiosyncrasies of early life at the Bar, and will therefore be sympathetic to your financial circumstances.
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Where next?
Within Pupil barrister…- Registering for tax & NIC
- Registering for VAT
- 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?
- How much should I put aside for taxes?
- 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…
