Accountants for Judges: Tax Changes When Leaving the Bar

Last updated: 3 March 2026

Appointment to the bench is a significant career milestone – and a significant tax event. Moving from self-employed barrister to salaried judge changes almost every aspect of your tax position: how your income is taxed, what you can deduct, how your pension works, and what happens to your practice assets. This guide covers the tax implications of the transition and how to plan for it.

The tax status change: self-employed to employed

As a practising barrister, you are self-employed and taxed under the trading income rules (ITTOIA 2005). You file a self-assessment tax return, claim business expenses, and pay Class 2 and Class 4 National Insurance.

As a judge, you become an employee of the Ministry of Justice (or, for tribunal judges, HMCTS). Your salary is subject to PAYE, and you pay Class 1 National Insurance. You lose the ability to claim the wide range of self-employment deductions that barristers rely on.

This transition is permanent for full-time salaried judges. Part-time fee-paid judges may retain some self-employment if they continue in practice – see below.

Your final self-assessment tax return as a barrister

In the tax year you cease self-employment, you must file a final self-assessment return covering your trading income up to the date you stop practising. Key points:

• Cessation date: the date you stop accepting instructions, not your appointment date. If you stop taking new work in July but complete existing cases into September, your cessation date is when the last fee is earned.
• Outstanding fees: any fees owed to you at cessation are taxable in the final period. Under the cash basis, you include them when received. Under accruals, you include them when earned.
• Terminal loss relief: if your final period produces a loss (perhaps because of low fee income and continuing chambers rent), you can carry that loss back against trading profits of the previous three years under s.89 ITA 2007.

For detailed guidance on barrister tax returns, see our tax retirement guide for barristers.

Cessation of self-employment: overlap relief and transitional adjustments

Under the old basis period rules, many barristers had overlap profits from their early years of practice – profits that were taxed twice during the opening year rules. These overlap profits are deducted in the final tax year of trading, reducing your cessation-year tax bill.

Following basis period reform in 2024/25, barristers who had overlap relief should have used some or all of it during the 2023/24 transitional year. If any overlap relief remains unused, it is still available on cessation. Check your records carefully – overlap relief can be worth thousands of pounds.

Judicial salary and PAYE

Judicial salaries for 2025/26 are set by the Senior Salaries Review Body. Current rates include:

Your salary is taxed through PAYE with no self-assessment requirement (unless you have other untaxed income). Tax is deducted at source monthly, which means your cash flow becomes more predictable but you lose the ability to manage payment timing.

Loss of self-employment expense deductions

This is where many new judges feel the pinch. As a self-employed barrister, you could deduct:

• Chambers rent and service charges
• Clerk’s fees (typically 8–12% of fee income)
• Practising certificate and Bar Standards Board fees
• Professional subscriptions
• Travel to courts outside your regular base
• Home office costs
• Books, journals, and legal databases
• Replacement wigs and gowns

As an employed judge, you can only deduct expenses that are incurred “wholly, exclusively and necessarily” in the performance of duties – a stricter test than the self-employed “wholly and exclusively” rule. In practice, very few expenses meet this threshold because most are provided by the court service.

For more on the deductions you may be giving up, see our guide on what you can afford to claim and what changes when becoming a judge.

Pension implications: Bar pension scheme vs judicial pension

The pension change is one of the most significant financial aspects of judicial appointment.

Bar pension arrangements

Most self-employed barristers contribute to a personal pension or SIPP, with tax relief at their marginal rate. Annual contributions are limited by the annual allowance (£60,000 for 2025/26, tapered for high earners). There is no employer contribution.

Judicial pension schemes

There are two distinct judicial pension schemes, and their tax treatment differs fundamentally.

NJPS 2015 — the registered scheme

The New Judicial Pension Scheme 2015 (NJPS 2015) is a registered pension scheme under Finance Act 2004. As a registered scheme, member contributions attract tax relief, and the scheme is subject to the annual allowance and associated pension input amount calculations. Judges who remained in or transitioned to NJPS 2015 are therefore exposed to annual allowance charges: because the pension input amount in a defined-benefit registered scheme is calculated by reference to the increase in accrued pension (multiplied by 16), and judicial salaries are significant, the deemed pension input in a given year can easily exceed the standard annual allowance of £60,000 (or the tapered annual allowance for high earners). This is a real and recurring tax cost for many salaried judges in NJPS 2015.

JPS 2022 — the unregistered scheme

Judges appointed from April 2022 join the Judicial Pension Scheme 2022 (JPS 2022), which is an unregistered pension scheme. This has significant tax consequences:

• Member contributions do not attract tax relief — unlike a registered scheme, contributions to JPS 2022 are made from post-tax income
• Employer contributions are not a taxable benefit in kind — specific legislation (Judicial Pensions Act 2022 and associated HMRC guidance) provides that employer contributions to JPS 2022 are not treated as employment income
• Annual and lifetime allowance rules do not apply — because JPS 2022 is unregistered, it falls outside the registered pensions tax regime; there is no pension input amount to calculate and no annual allowance charge
• Accrual rate: 1/43.1 of pensionable earnings per year
• Member contribution: 4.26% of salary (from post-tax income)
• Normal pension age: linked to State Pension age (currently 67)
• Lump sum: option to commute part of pension for a tax-free lump sum

The judicial pension under JPS 2022 remains highly valuable in cash terms. A circuit judge serving 15 years accrues a pension of approximately £52,700 per year (15/43.1 × £151,497), plus the option of a lump sum. The unregistered status removes the annual allowance headache, though it also removes the upfront tax relief on contributions.

Annual allowance charges and Scheme Pays (NJPS 2015 members only): if you are in the registered NJPS 2015 scheme, the annual allowance can create significant problems. The pension input amount — calculated as (increase in accrued pension × 16) — may exceed your available annual allowance, including any carried-forward allowance from previous years. This triggers a personal annual allowance charge payable on your self-assessment return. You can elect for Scheme Pays, which allows HMRC’s charge to be settled directly from your pension benefits rather than from your personal funds, in exchange for a corresponding reduction in your pension entitlement.

For pension planning options, see our pension planning services.

Can you carry on part-time practice?

Full-time salaried judges must not practise at the Bar. However, several judicial roles allow continued practice:

• Fee-paid judges (Recorders, Deputy District Judges, fee-paid Tribunal Judges) sit part-time and may continue in practice
• Deputy High Court Judges sit on specific cases and continue their main practice

If you hold a fee-paid appointment alongside your practice, you have both self-employed and employed income. You continue to file self-assessment for the self-employed element while the fee-paid judicial income is taxed through PAYE. This dual status requires careful management.

Capital gains considerations

Leaving the Bar may trigger capital gains events:

• Chambers interest: if you own a share of your chambers building (rather than renting), disposing of that interest on departure may crystallise a capital gain. Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) may apply, giving a 10% CGT rate on gains up to the £1 million lifetime limit.
• Practice assets: selling or transferring books, furniture, or equipment may technically trigger capital gains, though in practice the amounts are usually below the annual exempt amount (£3,000 for 2025/26).
• Goodwill: a sole practitioner barrister’s practice has no transferable goodwill (the work is personal), so there is no goodwill disposal to consider.

For guidance on tax planning around these events, see our tax planning services.

Worked example: barrister becoming a circuit judge

James is a barrister earning £120,000 net (after chambers expenses) in 2025/26. He is appointed as a circuit judge from 1 September 2026, with a salary of £151,497.

Final year as a barrister (6 April – 31 August 2026: 5 months)

Judicial salary (1 September 2026 – 5 April 2027: 7 months)

Total 2026/27 tax position

Key planning point: James’s overlap relief of £8,500 reduces his final trading profit significantly. Without it, his total tax bill would be approximately £3,400 higher. He should also consider maximising pension contributions in his final self-employed year to use any remaining annual allowance before entering the judicial pension scheme.

From April 2026, self-employed income over £50,000 falls within Making Tax Digital for Income Tax. James would need to file quarterly digital updates for his final months of self-employment before his cessation date.

Planning the transition: what to do 12 months before appointment

1. Review overlap relief: confirm the amount available from your accountant’s records. This may date back to your first years in practice.
2. Maximise pension contributions: use carry-forward rules to contribute up to three years’ unused annual allowance before entering the judicial scheme.
3. Accelerate expenses: bring forward any planned equipment purchases or chambers improvements into your final trading year.
4. Outstanding fees: chase all outstanding fees before cessation. Under the cash basis, fees received after cessation may create complications.
5. Chambers departure: negotiate your exit from chambers. Check your tenancy agreement for notice periods and any financial obligations on departure.
6. Insurance run-off: arrange professional indemnity insurance run-off cover for claims arising from past work.
7. Notify HMRC: deregister for VAT (if registered) and notify cessation of self-employment. This step requires careful planning if you have significant outstanding fees (aged debt) at cessation — see the VAT section in the FAQs below. In brief, the final VAT return normally requires you to account for output VAT on all outstanding debtors at the deregistration date in one go. HMRC operates a special arrangement allowing barristers to account for VAT on those outstanding debts as and when each debt is paid, rather than in a single lump sum. You must apply to HMRC for this arrangement before or at the point of deregistration — do not wait until the return is due.
8. Capital gains planning: if disposing of a chambers interest, consider timing to use the annual exempt amount effectively.

Frequently asked questions

Do I need to deregister for VAT when I become a judge?

Yes. If you are VAT-registered as a barrister, you must deregister when you cease self-employment. You must deregister within 30 days of ceasing to make taxable supplies. Your final VAT return will cover the period up to your deregistration date and must include any VAT on assets you retain.

Bear in mind that on deregistration, if you are on invoice accounting (accruals basis), output VAT is due on all outstanding debtors at the date of cessation — not just new invoices raised after deregistration. For a barrister with, say, £200,000 in outstanding fees from solicitors and lay clients, that is £40,000 of output VAT falling due in a single return. This can cause a severe cash flow problem if those fees have not yet been collected.

HMRC operates a special arrangement for this situation: rather than accounting for the full output VAT on all aged debt in the final return, you can apply to HMRC to account for VAT on each outstanding debt as and when it is actually received — effectively a cash accounting treatment for the run-off period. This significantly eases the cash flow burden. You must apply to HMRC for this arrangement; it is not automatic. Raise this with your accountant well before your cessation date.

What happens to VAT on outstanding fees when I deregister?

When you deregister for VAT, your final VAT return must account for output VAT on all outstanding debtors at the date of cessation — that is, all fees that have been invoiced but not yet paid. If you are on invoice accounting (as most barristers are), you cannot simply ignore unpaid invoices and wait to account for the VAT when the money arrives.

For a barrister with substantial aged debt, this can mean a very large one-off VAT payment. HMRC recognises this and offers a concession: you can apply to account for the VAT on those outstanding debts as and when each amount is received, rather than in a single lump sum on the final return. This mirrors the cash accounting basis and spreads the liability over the collection period. You must request this arrangement in writing from HMRC before or at the point of deregistration — it is not available automatically. Your accountant should handle this as part of the cessation process.

Can I claim expenses for travelling to court as a judge?

Judges posted to a fixed court cannot claim travel expenses for their daily commute – the same rule applies as for any employee travelling to a permanent workplace. However, if you are directed to sit at a different court (for example, a circuit judge sent to another court for a specific case), travel to that temporary workplace is deductible.

What happens to my self-assessment payments on account?

In your final year of self-employment, you may have made payments on account based on the previous year’s liability. When your actual liability is calculated (which may be lower due to part-year trading and overlap relief), any overpayment is refunded. You should also apply to reduce your second payment on account if you know your income will be lower.

Is the judicial pension affected by the lifetime allowance?

The lifetime allowance was abolished from 6 April 2024. There is no longer a limit on the total value of pension benefits you can accumulate. However, the lump sum allowance (£268,275) and the lump sum and death benefit allowance (£1,073,100) still apply to tax-free lump sums.

Can I return to the Bar after serving as a judge?

Technically yes, but it is extremely rare and subject to restrictions. A retired judge returning to practice would re-enter self-employment and would need to re-register for self-assessment and potentially for VAT. The tax position would be treated as a new commencement of trade, with opening year rules applying afresh.