Barrister: Registering for VAT
Strictly you do not need to register for VAT until you reach the stage where your fees have exceeded the annual VAT threshold, or are likely to within the next 30 days. For 2008/09 the threshold is £67,000. It is normal for us to recommend that you register for VAT immediately. The reasons for this are twofold: you can start claiming back straight away the VAT that you have incurred on your business expenses and you do not have to monitor carefully your turnover levels to make sure you have not exceeded the threshold. You register by completing and submitting form VAT1 and we can deal with this for you. In many Chambers your clerk will do this for you at the outset; but you should check. When you register, you can actually choose your quarterly accounting date. You should check with Chambers, because most sets of Chambers prefer all their members to have the same VAT quarter date as Chambers itself. Your first VAT return will be for a one, two, or three month period, depending on the quarter date that you have chosen, or have been allocated. Rather than adopting the standard method of accounting for VAT you may be eligible to join the optional flat rate scheme. Under this scheme you calculate your VAT payment as a fixed percentage of your total fees. One advantage of the scheme is in reducing administration because you don't need to record the VAT charged on each individual receipt and payment. Depending on how your chambers accounts for various expenses, you may in general pay either more or less VAT under the flat rate scheme. We can advise you whether you will be eligible for the scheme and also whether you are likely to pay less VAT if you join the scheme.
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Where next?
Within Pupil barrister…
- Registering for tax & NIC
- 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?
- 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…
