Can I still use the cash basis under Making Tax Digital?

Yes. Making Tax Digital does not change your entitlement to use this method. If you currently report fees on a cash basis (recording income when received, not when earned), you may continue to do so.

Making Tax Digital for Barristers

Last updated: 6 March 2026

From 6 April 2026, self-employed barristers and those with property income above certain thresholds must keep digital records and file quarterly updates under Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA). This is the most significant change to how practitioners at the Bar report their income since Self-Assessment replaced the old Schedule D tax return in 1996/97. This guide explains who is affected, the deadlines, what software you need, how the rules will be enforced, and how to prepare your practice before the deadline.

Who Is Affected?

MTD for Income Tax is being rolled out in phases based on gross income thresholds. “Gross income” means total fees received (or receivable) before deducting any expenses. It is not taxable profit. The revenue uses the figures from your most recent tax return to determine which phase applies.

Phase 1: April 2026 – Gross Income Over £50,000

If your combined gross self-employment income and property income exceeds £50,000 in a tax year, you must comply from 2026/27 onwards. For most barristers at this level, the first quarterly update is due by 7 August 2026.

Phase 2: April 2027 – Gross Income Over £30,000

From 2027/28, the threshold drops to £30,000 gross income. Barristers earning between £30,000 and £50,000 in combined self-employment and property income will join the scheme.

Phase 3: To Be Confirmed – Gross Income Over £20,000

A further extension to those with gross income above £20,000 has been announced, though the exact start date has not yet been confirmed. The government has indicated this will not be before April 2028 at the earliest.

Important: It Is Gross Income, Not Profit

A barrister whose gross fees total £65,000 but whose taxable profit is only £40,000 after chambers rent and professional expenses is still caught by Phase 1. The £50,000 threshold applies to gross receipts. This catches many practitioners who might otherwise assume they fall below the limit.

If you also receive rental income, that is combined with your self-employment income. A barrister earning £35,000 in fees and receiving £20,000 in rental income has combined gross income of £55,000 and falls within Phase 1.

Do Partnerships Count Towards the Threshold?

Yes, but the test is applied at the individual partner level, not at the partnership level. HMRC looks at each partner’s share of the partnership’s gross income (not profit), combined with any other self-employment or property income that partner receives personally.

This is relevant to barristers who have formed a partnership – for example, a costs-sharing arrangement with another member of chambers, or a husband-and-wife property partnership alongside practice at the Bar. If your personal share of partnership gross income plus your individual self-employment fees exceeds £50,000, you fall within Phase 1 from April 2026. The partnership itself does not file; each partner does so individually through their own compatible software.

Partnership returns will eventually be brought within the scheme, but no date has been set. For now, the obligation sits with each individual partner.

What Must You Do Under MTD?

Keep Digital Records

You must maintain digital records of all income and expenses using compatible software. Spreadsheets connected via bridging software are permitted, but standalone spreadsheets are not. Your records must include:

The date, amount, and category of each transaction
All self-employment income (fees received, fees receivable, and any other practice income)
All allowable expenses (chambers rent, practising certificate, travel, professional subscriptions, insurance, and other deductions)
Property income and expenses (if applicable)

Recording a fee in a paper diary or unconnected notebook is no longer sufficient. Every transaction must be captured in software that can transmit data to HMRC digitally.

File Quarterly Updates

Instead of a single annual Self-Assessment tax return, you must send a summary of your income and expenses to HMRC four times per year. The quarterly periods and deadlines are:

Quarter	Period Covered	Deadline
Q1	6 April – 5 July	7 August
Q2	6 July – 5 October	7 November
Q3	6 October – 5 January	7 February
Q4	6 January – 5 April	7 May

You may elect to use calendar quarters (1 April – 30 June, etc.) instead if that suits your record-keeping. Each submission is digital – there is no paper alternative.

Submit an End of Period Statement (EOPS)

After the fourth quarterly update, you must submit an End of Period Statement by 31 January following the end of the tax year. This confirms that all your submissions are complete and accurate. Think of it as a final check before your tax position is crystallised.

Submit a Final Declaration

The Final Declaration replaces the current Self-Assessment tax return. It brings together all sources of income and allows you to claim reliefs, make pension contribution elections, and confirm your final tax liability. The deadline remains 31 January after the end of the tax year.

What Does a Quarterly Update Contain?

Each quarterly update is a summary – not a line-by-line transaction log. You report:

Total income for the quarter
Total expenses for the quarter, broken down by prescribed categories

You do not need to send copies of receipts or invoices. However, you must retain your records as supporting evidence and have them available if HMRC opens an enquiry. Your adviser can review the figures before each submission to ensure the categorisation is correct.

Can I Still Use Excel Under MTD?

This is one of the most common questions practitioners ask. The short answer: only if your Excel spreadsheet is linked to HMRC via bridging software.

A standalone Excel workbook – even one with sophisticated formulae and macros – does not satisfy the digital records requirement on its own. HMRC requires an unbroken digital link from your records to their systems. If you type figures from a spreadsheet into a separate submission portal, that breaks the link and is non-compliant.

Several bridging software providers (including BTCSoftware and 123 Sheets) offer add-ins that connect Excel directly to the API. If you prefer to continue using Excel for day-to-day record-keeping, this is a viable route – but you must ensure the bridging product is on the government’s list of compatible software. Your adviser can help you decide whether a bridging solution or full cloud accounting software (such as Xero or FreeAgent) is the better option.

Cash Basis and MTD

Many barristers report their self-employment income on the cash basis, which records income when fees are actually received rather than when they are earned. This approach is available to most self-employed practitioners and is often simpler than accruals accounting, particularly for those whose fee income arrives irregularly.

The new rules do not change whether you can use this method. If you currently report on this basis, you may continue to do so. Your quarterly updates will reflect fees actually received during each quarter, and expenses actually paid. This can create lumpy figures – a brief with a large fee received in Q2 will spike that quarter’s reported income – but that is expected and does not trigger additional tax. Your final tax liability is still calculated on the full year, not per quarter.

Those on the accruals method should note that MTD does not require a switch. You may continue with accruals accounting if that better reflects your practice. Speak to your adviser about which approach suits your circumstances – see our guide on receipts-based reporting for barristers for a detailed comparison.

Software Requirements

HMRC requires you to use software that connects to its systems via the MTD Application Programming Interface (API). The software must be able to:

Store digital records of income and expenses
Submit income and expense summaries each quarter
Receive information back (such as estimated tax calculations)
Submit the End of Period Statement and Final Declaration

HMRC publishes a list of compatible software. Popular options for barristers include Xero, FreeAgent, and Sage. Jack Ross can set up and manage the software for you as part of our personal tax return service.

The 2026/27 Soft-Landing Period

For the first year of MTD for ITSA (2026/27), a soft-landing period has been confirmed. During this year:

Late submission penalties will not be charged for quarterly updates submitted within one month of the deadline
You will not receive penalty points for the first four submissions if filed within the grace period
The focus will be on education rather than enforcement
You must still maintain compliant records and submit updates – the soft-landing applies only to late filing penalties, not to the obligation itself

This does not mean you can ignore the deadlines. The soft-landing is intended to allow for genuine teething problems, not to excuse a failure to prepare. Barristers who have not set up compatible software before the start date will find themselves scrambling, and the grace period will not cover fundamental non-compliance.

Penalties for Non-Compliance

From 2026/27, a new points-based penalty system replaces the old fixed-penalty regime. Full details are set out in the penalties and compliance guide.

Late Submission Penalties

Each late submission earns one penalty point
When you accumulate 4 penalty points, you receive a £200 penalty
Every subsequent late submission while at the penalty threshold also triggers a £200 penalty
Points expire automatically after 24 months of compliance (submitting all returns on time)

Late Payment Penalties

Tax unpaid after 15 days: a first penalty calculated at 2% of the outstanding amount
Tax unpaid after 30 days: a further 2% penalty on the amount still outstanding at day 30
Tax unpaid after 30 days: an additional daily penalty at an annualised rate of 4% until payment is made

Corporation Tax

HMRC has not announced a start date for MTD for Corporation Tax. Barristers who operate through a limited company are not currently required to file under MTD for Corporation Tax. The existing Corporation Tax Self-Assessment regime continues to apply. If you are considering incorporation as a barrister, this is not a factor in that decision at present.

VAT

MTD for VAT has been in force since April 2022 for all VAT-registered businesses. If your practice is registered, you should already be filing returns through compatible software. If you are not yet compliant, you need to act immediately. Jack Ross provides a full VAT return service for barristers that ensures your filings meet all requirements.

Worked Example

Scenario: Sarah is a self-employed barrister in her eighth year of practice. In 2025/26, her gross fee income is £120,000. She also receives £30,000 gross rental income from a buy-to-let property. She reports on a receipts basis and is not registered for value added tax.

Step 1: Does MTD apply?

Sarah’s combined gross income is £150,000 (£120,000 fees + £30,000 rent). This exceeds the £50,000 threshold, so she falls within Phase 1. HMRC will use her 2024/25 tax return to confirm she is above the threshold.

Step 2: What happens in 2026/27?

Sarah must begin keeping compliant records from 6 April 2026 using compatible software. Her quarterly updates are due as follows:

Quarter	Period	Deadline	Income to Report
Q1	6 Apr – 5 Jul 2026	7 Aug 2026	£30,000 fees + £7,500 rent
Q2	6 Jul – 5 Oct 2026	7 Nov 2026	£30,000 fees + £7,500 rent
Q3	6 Oct 2026 – 5 Jan 2027	7 Feb 2027	£30,000 fees + £7,500 rent
Q4	6 Jan – 5 Apr 2027	7 May 2027	£30,000 fees + £7,500 rent

Because Sarah reports on a receipts basis, each quarter’s figure reflects fees actually received during that period. If a large brief fee of £25,000 arrives in Q2, that quarter will show higher income than the others – this is normal and does not affect her overall tax position.

Sarah also reports her allowable expenses each quarter. Her chambers rent is £30,000 per year (£7,500 per quarter), her practising certificate is £1,200, professional subscriptions total £600, and she claims £3,000 in travel expenses. Her property expenses are £8,000 per year.

Step 3: End of Period Statement and Final Declaration

By 31 January 2028, Sarah submits her End of Period Statement confirming the quarterly figures, then her Final Declaration. Her total self-employment profit is £85,200 (£120,000 fees less £34,800 allowable expenses). Her rental profit is £22,000 (£30,000 less £8,000 expenses). Her combined taxable income is £107,200, before personal allowance and any pension contributions.

What Should You Do Now?

Check your gross income. Look at your total fees received (before any deductions) for 2024/25 or 2025/26. If the figure exceeds £50,000, you are in Phase 1.
Choose compatible software. Speak to your adviser about which option suits your practice. If you do not have a preference, Jack Ross will recommend and set up the right package as part of our Making Tax Digital service for barristers.
Start keeping records now. Beginning your record-keeping before the deadline means fewer problems at go-live.
Confirm your accounting basis. Decide whether you will report on a receipts or accruals basis. Most barristers use the former, but your adviser should confirm which is appropriate.
Review your expense categories. The rules require expenses to be categorised according to HMRC’s prescribed list. Make sure your record-keeping separates chambers rent, travel, professional subscriptions, and other deductible costs.
Talk to a specialist. If your current adviser is not familiar with the specific requirements for barristers, consider switching. Jack Ross has been handling barrister tax affairs since 1948.

Read our comprehensive Barrister Tax Guide for further detail on allowable expenses, tax deductions, and how to structure your affairs efficiently.

Frequently Asked Questions

Do I need to file quarterly if I use an accountant?

Yes. The obligation to file quarterly updates applies regardless of whether you use an accountant. However, your adviser can file on your behalf using shared access to your software. At Jack Ross, we handle the entire process – you provide us with your records (or we access them through shared software), and we submit each update before the deadline. Using a professional adviser does not create an exemption, but it does mean you never need to interact with HMRC’s systems yourself.

Can I still use Excel under MTD?

Only if your Excel spreadsheet is connected to HMRC via compatible bridging software. A standalone Excel workbook – no matter how detailed – does not meet the requirements because it lacks a digital link. Bridging software providers such as BTCSoftware offer Excel add-ins that transmit your data directly to the API. If you prefer Excel, this is a compliant route, but you must ensure the bridging product is on the government’s approved list.

Does pupillage award income count towards the threshold?

Pupillage awards are generally treated as self-employment income for tax purposes. If your pupillage award plus any other self-employment or property income exceeds the relevant threshold, you will be caught. Most pupils will be below the £50,000 threshold during pupillage, but those with significant property income should check. See our guide to pupillage awards and tax.

Do partnerships count towards the threshold?

The threshold is tested at the individual level, not the partnership level. HMRC looks at each partner’s share of the partnership’s gross income, combined with any personal self-employment or property income. If your total exceeds £50,000, you must comply from April 2026 – even if the partnership’s aggregate turnover is below that figure. Each partner files individually.

Can I still use the cash basis?

Yes. The new rules do not change your entitlement to use this method. If you currently report fees when received rather than when earned, you may continue to do so.

What if my income drops below the threshold mid-year?

Once you are within MTD for a given year, you must complete all four submissions for that year. If your income drops below the threshold in a subsequent year, you may apply for exemption. However, you cannot opt out mid-year.

Is there Making Tax Digital for Corporation Tax?

No start date has been announced. If you operate through a limited company, you are not currently required to file under the scheme. The existing annual Corporation Tax filing regime continues.

What penalties will I face if I miss a deadline?

Under the new points-based system, each late submission earns one penalty point. At 4 points, you receive a £200 fine, and every subsequent late submission also triggers £200. Points expire after 24 months of full compliance. During the 2026/27 soft-landing period, penalty points will not be issued for submissions made within one month of the deadline.

Sources

Need help preparing for Making Tax Digital? Jack Ross Chartered Accountants has been advising barristers since 1948. We handle MTD setup, software configuration, and quarterly filings so you can focus on your practice.

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Making Tax Digital for Barristers: Complete Guide for April 2026