Are you a self employed Barrister and unsure about the expenses you can deduct from your income to ensure you are taxed correctly on your self employed earnings?
As a self-employed Barrister, the amount of tax you owe will depend on how much money you earned during the tax year (and accounting period if a limited company), but there are some expenses you can deduct which in turn reduces your tax liability.
You are permitted by HMRC to write off the cost of a number of purchases that you make in order to operate your business. These expenses can be subtracted from your income, which will reduce your profit and in turn reduce the tax you owe.
Self-employed Barristers frequently forget to submit proper expense claims, which might range from a new laptop to insurance coverage to general stationery purchases. In this article, we aim to provide you with some of the key information you need to prevent losing a significant portion of your income on unclaimed business expenses.
We are a firm of Chartered Accountants providing specialist accounting and tax services for self employed Barristers.
If you require help with your accounting and tax, we would be more than happy to help. Please do not hesitate to call us on 0116 298 2425 or e-mail your enquiry to enquiries@barristeraccountantuk.co.uk
What are allowable expenses?
Allowable expenses are costs incurred “wholly and exclusively” for your business. These expenses are deductible from your taxable income. It’s important to keep accurate records of these expenses, including receipts and invoices, in case HMRC requires evidence.
Common expenses you can claim
Office and work-related costs
As a barrister, you often incur costs related to your chambers or home office. Claimable expenses include:
- Chambers rent and fees: If you rent space in chambers, the cost is fully deductible.
- Home office costs: If you work from home, you can claim a proportion of household bills (e.g., electricity, gas, internet) based on the space used for work. Alternatively, you can use the simplified expenses HMRC rates:
Hours of business use per month Flat rate per month 25 to 50 £10 51 to 100 £18 101 and more £26 - Office supplies: Items like stationery, printer ink, and postage costs.
Travel and subsistence
Travel is a significant expense for many barristers. Allowable travel expenses include:
- Public transport: Train, bus, or taxi fares for attending court or client meetings.
- Mileage: If you use your car for work, you can claim mileage (45p per mile for the first 10,000 miles, 25p thereafter).
- Accommodation: Hotel stays for work purposes, such as attending trials in other cities.
- Meals: Subsistence costs while traveling for work, provided they are reasonable and directly linked to business activities.
Professional fees and subscriptions
Many of the fees and subscriptions you pay as a barrister are deductible, including:
- Bar Standards Board fees: Regulatory fees paid to maintain your practicing certificate.
- Professional indemnity insurance: Essential insurance coverage for your practice.
- Membership subscriptions: Fees for joining professional bodies like the Bar Council or specialist bar associations.
Legal research and training
Keeping up-to-date with legal developments is critical to your work. Deductible expenses include:
- Legal publications: Subscriptions to legal databases (e.g., Westlaw, LexisNexis) and journals.
- Training and CPD: Costs of continuing professional development (CPD) courses required to maintain your practice standards.
Technology and equipment
The cost of technology and equipment used for work is also claimable:
- Laptops, tablets, and phones: Devices used for drafting, research, or client communication.
- Software: Legal practice management or case management software.
- Maintenance and repairs: Costs for repairing or maintaining business equipment.
Marketing and networking
To build and maintain your practice, you may incur marketing-related expenses such as:
- Website and branding: Costs of creating or maintaining a professional website.
- Networking events: Fees for attending events aimed at professional development or client acquisition.
Miscellaneous costs
Other allowable expenses include:
- Clerking and administrative support: Payments to clerks or assistants who manage your diary and casework.
- Court fees: Filing or other fees incurred during the course of legal work.
- Bank charges: Business account fees and interest on loans directly related to your practice.
Expenses you cannot claim
Not all expenses are deductible. For instance:
- Personal costs: Any costs with a dual purpose, such as clothing (even suits worn to court), are not deductible unless they are specialist items (e.g., robes or wigs).
- Commuting costs: Travel between home and your regular place of work is not claimable.
- Fines or penalties: Any fines incurred, even while traveling for work, cannot be deducted.
Record-keeping and best practices
To ensure compliance and maximize your claims:
- Keep detailed records: Maintain receipts, invoices, and bank statements for all expenses.
- Use accounting software: We can set you up with a simple spreadsheet to record your income and expenses at no extra cost. We have specifically designed this which most of our Barrister clients use with ease. Alternatively, cloud based softwares such as Xero, QuickBooks or FreeAgent can help track your income and expenses.
- To keep yourself on the right track don’t forget that all expenses should be discussed with your accountant to ensure that they are valid claims.
If you are looking for an accountant to help and guide you with your accounting and tax needs, please get in touch. E-mail us at enquiries@barristeraccountantuk.co.uk or call us on 0116 298 2425.