press releases

HMRC clampdown on barristers

5 February 2010

You may have seen recent press coverage regarding a possible clampdown by HM Revenue & Customs (HMRC) on barristers. We understand that a specialist unit has in fact been set up by HMRC to conduct investigations into barristers’ tax affairs because it has identified barristers as having poor record keeping generally and inaccurate tax returns.

The areas that HMRC is likely to consider in the course of an investigation include: transition from cash to accruals basis after 7 years, valuation of incomplete work (UITF40) and inaccurate or unsubstantiated claims for expenses.

UITF40 is an area of weakness for many barristers. Even if you think it doesn’t apply to you, it is essential to document that you have considered the work that is not completed at the year end and taken account of any unrealised profit.

For our existing clients, assuming you have given us full facts regarding all of your income, gains or other profits there should not be a problem.

If you are not a Cassons client and you are not represented by a recognised bar specialist accountant, you might consider taking additional advice. There are many complexities in barristers’ accounts and you need expert advice.

If you are currently experiencing a tax enquiry please get in touch with us as we may be able to help!

A tax enquiry can take up a considerable amount of both your time and that of your adviser in dealing with HMRC and its queries, especially if your adviser is not a bar specialist. Your adviser will inevitably have to commit significant time, at your expense, to fighting a tax enquiry for you. So, even if there is nothing wrong and no extra tax to pay at the conclusion of the enquiry, you are likely to incur substantial professional costs. These costs (but not the tax) may be covered by a tax fee protection scheme. Please contact us for further information.