Introduction to Tax Planning for Barristers 2024

by Umar Memon

Since 1948, Jack Ross Chartered Accountants has provided state-of-the-art barrister accounting services in Greater Manchester and beyond. We pride ourselves on our dedication to financial integrity and technological innovation. Whether you are a sole trader or a large Chamber, our clients are our priority.

If you need our expert barrister accounting services, fill out the contact form on the right to book a free consultation.

As a barrister, you are undoubtedly aware of the complexities surrounding tax and pension contributions. At Jack Ross, we have hundreds of barrister clients, from pupils to King’s Counsel. We have found that those that better understand their tax position see significant improvements in the financial health of their practice. This guide explains pension contributions and tax-saving strategies for the 2023/24 financial year.

Annual Allowance for Pension Contributions

For the tax year 2023/24, your annual allowance for pension contributions is £60,000. This cap includes all contributions, whether personal, from employers, or made on your behalf. It is crucial to recognise that if your earnings fall below £60,000, your tax relief is capped at 100% of your earnings. Should your income not exceed £3,600, you can still contribute £2,880 to receive full tax relief.

Barristers earning over £200,000 need to be particularly vigilant, as the tapered annual allowance could reduce your pension limit to as low as £10,000, affecting your tax planning and savings.

Unused Allowances

You can carry forward any unused pension allowances from the previous three years. This strategy aids in maximising your contributions while avoiding additional tax charges, helping long-term financial planning.

Individual Savings Accounts (ISAs)

The tax year 2024/25 allows a £20,000 ISA allowance for adults and £9,000 for Junior ISAs. Leveraging ISAs for tax-free income and growth can be a prudent aspect of your financial strategy as a hedge against future tax liabilities.

Charitable Contributions and Tax-Efficient Investments

Making charitable donations through Gift Aid benefits charities and extends your basic rate tax band, potentially lowering your tax burden.

Additionally, considering the associated investment risks, consider exploring EIS, SEIS, and VCTs for potential tax reliefs.

Business Expenses and Record-Keeping

Diligence in maintaining and logging your business receipts is very important. This ensures you claim tax relief on all legitimate barrister-related expenses, lowering your overall tax payment. Remember, records must be kept for at least five years after the relevant tax year’s submission deadline, as HMRC mandates. At Jack Ross, we provide you with a digital inbox where you simply email receipts and then leave them to us to ensure all your costs are captured.

Early Preparation of Annual Accounts

Prompt preparation of your annual accounts after the accounting year-end is advisable. It helps you understand forthcoming tax liabilities and plan accordingly, ensuring financial stability and compliance. We will get in touch soon after the fiscal year ends to arrange for your accounts to be completed.

Get in Touch with Jack Ross

Understanding pensions, taxes, and investments requires meticulous planning for barristers in the UK. Maximising your pension contributions, using ISAs, engaging in tax-efficient investing, and keeping accurate records enhances your financial security. Jack Ross does the hard work for you, so you can focus on what is important: running your practice.

Seeking specialised accounting services for barristers? Complete the contact form below and a Jack Ross advisor will be in touch to organise a free 15 minute consultation with one of our Tax Managers.