Basis Period Reform for Barristers: What Changed in 2024/25

Last updated: 28 February 2026

Basis period reform is one of the most significant changes to self-employment taxation in decades. From 2024/25, all self-employed individuals – including barristers – are taxed on the profits arising in the tax year (6 April to 5 April), regardless of their accounting date. For most barristers this change is straightforward, but for those with non-standard accounting dates, the 2023/24 transitional year created additional taxable profits that are being spread over five years.

What changed: the move to tax year basis

Before 2024/25, self-employed profits were taxed based on accounting periods using the “current year basis” (CYB). The accounting period ending in the tax year determined which profits were taxed in that year. From 2024/25 onwards, all self-employed individuals are taxed on the profits arising in the tax year itself – 6 April to 5 April (or 1 April to 31 March, which HMRC treats as equivalent).

This is called the tax year basis. It applies automatically from 2024/25 with no option to remain on the old rules.

The old rules: accounting periods and basis periods

Under the current year basis, the rules worked as follows:

• General rule: profits were taxed based on the accounting period ending in the tax year. A barrister with a 30 June year-end would be taxed in 2022/23 on profits for the year ending 30 June 2022.
• Opening year rules: in the first two or three years of practice, special rules applied that could result in profits being taxed twice – creating “overlap profits.”
• Closing year rules: on cessation, overlap profits were deducted from the final year’s taxable profit.

This system was complex and created timing mismatches. A barrister with a 30 June 2022 year-end was not taxed on those profits until 2022/23 – a delay of up to 21 months from when the first profits in that period were earned.

For more on how barristers’ income is taxed, see our guide on the tax treatment of barristers’ income.

The new rules: tax year basis from 2024/25 onwards

From 2024/25, the rules are simpler:

• Profits assessed on: the tax year (6 April – 5 April), regardless of accounting date
• Accounting date matches tax year: if your accounting year-end is 31 March or 5 April, no apportionment is needed – your accounting profits equal your taxable profits
• Accounting date differs from tax year: you apportion profits from two accounting periods to arrive at the tax year figure. For example, a 30 June year-end means the 2025/26 taxable profit is 3/12 of the year ending 30 June 2025 plus 9/12 of the year ending 30 June 2026

Most barristers already used a 5 April or 31 March year-end, so the practical impact is minimal. Those with non-standard accounting dates face ongoing apportionment calculations.

The 2023/24 transitional year explained

The year 2023/24 was the transitional year bridging the old and new systems. For barristers with accounting dates other than 31 March or 5 April, HMRC needed to “catch up” on profits that had not yet been taxed due to the timing lag under the old system.

How it worked:

1. Standard profits: taxed as normal under the old current year basis (the accounting period ending in 2023/24)
2. Transition profit: any additional profits needed to bring the assessment up to 5 April 2024, less any available overlap relief
3. Spreading: the transition profit is automatically spread equally over five tax years (2023/24 to 2027/28), adding one-fifth to each year’s taxable income
4. Election to accelerate: you can elect to include more than one-fifth in any year – useful if you have a low-income year or want to use the personal allowance more effectively

Overlap relief: using up old overlap profits

Overlap profits arose during the opening years of practice under the old rules. If you started practice before 2024, you may have overlap relief available. This relief is deducted from the transition profit, reducing the amount subject to spreading.

Key points on overlap relief:

• Check your records: the overlap figure should appear on your tax return from your opening years. If your accountant has changed over the years, you may need to trace the original computation.
• HMRC records: HMRC should hold a record of your overlap profits, but these records are not always reliable. Your own records take precedence.
• Use it or lose it: overlap relief not used in the 2023/24 transition year is available on cessation of the trade (for example, if you become a judge or retire). There is no other opportunity to claim it.

Impact on barristers specifically

The impact of basis period reform depends entirely on your accounting date:

The majority of barristers at the self-employed Bar already use a 5 April year-end. This has been standard practice for decades, partly because barristers’ earnings are irregular and a tax year-end simplifies cash basis reporting. For these barristers, basis period reform changes very little in practice.

Barristers who used a different accounting date – often those who started practice before current conventions or who were advised to use a different date for tax planning reasons – face the full impact of the transition.

For guidance on the cash basis for barristers’ earnings, see our dedicated article.

Cash basis vs accruals under the new rules

Basis period reform does not change whether you use the cash basis or accruals basis – that remains a separate choice. However, the interaction matters:

• Cash basis: you recognise income when received and expenses when paid. Under the tax year basis, you include all cash received between 6 April and 5 April. This is the simplest approach and the default for most barristers.
• Accruals basis: you recognise income when earned and expenses when incurred. Under the tax year basis, if your accounting date differs from 5 April, you need to apportion accruals-based profits across two accounting periods to arrive at the tax year figure.

For barristers on the cash basis with a 5 April year-end, the new rules require no change in practice whatsoever. The combination of cash basis plus tax year-end is the simplest possible position.

Worked example: barrister with 30 June accounting date

Rachel is a barrister who has always used a 30 June accounting date. Her profits are:

Rachel has overlap profits of £18,000 from her opening years.

2023/24 transitional year calculation

Spreading the transition profit

*Estimated profits for illustration. From 2024/25, these are apportioned to the tax year.

At a 40% marginal rate, the transition profit costs Rachel £25,800 in additional tax over five years (£5,160 per year). Without overlap relief, it would have cost £33,000.

Rachel can elect to accelerate the spreading – for example, including more in a year where her standard profits are unusually low. She cannot defer it beyond 2027/28.

What this means for your 2025/26 and 2026/27 returns

For the 2025/26 tax year and beyond:

• 5 April year-end barristers: report your profits for 6 April 2025 to 5 April 2026 as normal. If you have transition profit from 2023/24, include one-fifth (or more if elected) as additional income.
• Non-standard year-end barristers: apportion profits from your two accounting periods that straddle the tax year. Continue including one-fifth of transition profit.
• Cash basis barristers: ensure you are capturing all receipts and payments within the tax year. The tax year basis means there is no lag – your return reflects what actually happened in the year.

From April 2026, barristers earning over £50,000 must also comply with Making Tax Digital for Income Tax, filing quarterly digital updates of income and expenses. The move to tax year basis aligns neatly with MTD’s quarterly reporting periods.

For planning your 2026/27 return and beyond, see our article on tax planning for barristers in 2026/27. For a broader overview of how barristers report their income, see our barrister self-assessment guide.

Frequently asked questions

Should I change my accounting date to 5 April?

If you have not already done so, there is a strong argument for aligning with the tax year. A 5 April (or 31 March) year-end eliminates the need for annual apportionment calculations and simplifies MTD quarterly reporting. The only reason to keep a different date is if it aligns with a specific commercial cycle or if your accountant advises otherwise for particular circumstances.

What if I started practice after April 2024?

If you commenced self-employment from 6 April 2024 onwards, the tax year basis applies from the start. There are no opening year overlap rules and no transition profit. You simply report profits for the tax year. This is significantly simpler than the old opening year rules.

Can I elect to include all transition profit in one year?

Yes. You can elect to include more than one-fifth of the transition profit in any year during the spreading period (2023/24 to 2027/28). You might choose to accelerate if you have a low-income year, have losses to offset, or want to crystallise the liability while tax rates are favourable. The election is made on your self-assessment return.

How do I find my overlap relief figure?

Your overlap relief should be recorded on your self-assessment tax return from your opening years of practice – typically the second or third year. Check the self-employment pages (SA103) or ask your accountant. If records have been lost, you can request the information from HMRC, though their records are not always complete. The figure does not change over time (it is not adjusted for inflation), so even overlap relief from the 1990s is claimed at its original nominal value.