Which expenses can I claim against tax?
The general rule for whether or not an expense is deductible for income tax purposes is that the expense must be incurred wholly and exclusively for the purpose of your practice. A distinction is drawn between capital expenditure and revenue expenditure. If revenue expenditure conforms to the general rule then it is allowed in full. Relief for capital expenditure such as, for example, the cost of your computer and car is given in the form of capital allowances. You can also claim relief on the cost of your court clothing, subject to certain rules. Typical expenses include:
- Clerk’s fees
- Chambers’ expenses
- Subscriptions, books and journals
- Postage and stationery
- Upkeep of wig and gown, collars, bands and studs
- Professional indemnity insurance
- Telephone
- Light and heat (if you use your home as an office), and mortgage interest payments
- Motor expenses
- Rail and air fares, car hire and hotel expenses
- Equipment hire
- Secretarial expenses
- Accountancy fees
- Bank charges and interest
- Hire purchase interest
In the case of telephone, motor expenses and the lighting and heating of a home office, you must work out the proportion of those expenses that are applicable to your practice. We will give you guidance with the calculation. In the case of motor expenses, you should keep a mileage log for a representative sample period in order to demonstrate your typical pattern of motoring.
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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?
- How much should I put aside for taxes?
- My first VAT return is due. Can you help?
- 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…
- Established barrister section
- Read about our Bar Department
- Meet Andrew Hood, Bar Department Manager
General…
