A barrister's accounting problem is a timing problem, not a compliance one. You are taxed on fees you may not have been paid, on dates set by a year you have already finished — and the first three years of practice are the sharpest version of it.
Self-employed barristers are regulated by the Bar Standards Board, not the SRA, and do not hold client money in an SRA client account. The SRA Accounts Rules content elsewhere on this site — reconciliations, residual balances, the annual SRA Accountant's Report — is written for solicitors' firms and does not apply to chambers. We act for barristers on the accounting and tax side, and we say which is which rather than blurring the two.
You raise a fee note. It is paid eighteen months later, or two years later, or after a reminder from the clerks that neither of you enjoyed. Meanwhile the tax on that fee falls due on a date that has nothing to do with when the money arrived.
The basis on which your practice profits are computed decides which tax year the fee is taxed in. Under the cash basis, a fee is taxed in the year it is actually received. Under the accruals basis, it is recognised when the work is done and billed, so tax can fall due long before payment. For a practitioner with a long aged-debt profile that is the difference between paying tax on money you have and paying tax on money you are still chasing, and it deserves a decision each year rather than a setting chosen once at the start of practice and never revisited.
The other half of the same job is keeping the aged fee note listing honest. A fee that will never be paid should not be sitting in your figures behaving like income, and a fee that has been outstanding for two years should be visible to you as a number, not as a feeling about a particular solicitor.
Self assessment payments on account fall due on 31 January and 31 July, set by reference to the year just filed. In a first year of practice there is no prior year, so nothing is collected. That is the trap, because the money does not feel like it is owed.
The following 31 January then brings the whole of the first year's income tax and Class 4 National Insurance, together with a first instalment towards the year you are already halfway through. A second instalment follows on 31 July. If year two is larger than year one — which for a junior practitioner it usually is — the January after that adds a balancing payment on top of the instalments already made. Two consecutive Januaries each exceeding a full year's tax is the standard shape of a new practitioner's third year.
Illustrative. A first full year's income tax and Class 4 National Insurance of £14,000 is met on 31 January, alongside a first instalment towards the following year, with a second instalment due on 31 July. Nothing about that is unusual and nothing about it is avoidable — but it is entirely forecastable, which is the point. The discipline is a separate reserve account funded as receipts come in, at a percentage set from your actual marginal rate rather than a round number. Illustrative figures.
2026/27 rates
Income tax for 2026/27 runs at 20% on the first £37,700 of taxable income, 40% from £37,701 to £125,140 and 45% above that, on a personal allowance of £12,570. With a full personal allowance the higher rate starts at £50,270. The allowance is withdrawn by £1 for every £2 of income above £100,000, so the band between £100,000 and £125,140 carries a markedly higher effective rate than the one above it. Every one of those thresholds is frozen until 5 April 2031, following the three-year extension announced at Budget 2025 on 26 November 2025.
On top of that, Class 4 National Insurance runs on the same profits at 6% between £12,570 and £50,270 and 2% above £50,270. So the real marginal cost of an extra pound of practice profit is 42% above £50,270 and 47% above £125,140. That is the number the reserve should be set from, and it is the number that makes the difference between a comfortable January and a conversation with the bank.
The VAT registration threshold is £90,000, unchanged since 1 April 2024 and confirmed unchanged for 2026/27 at Budget 2025. The deregistration threshold is £88,000 and the standard rate is 20%. There are two separate registration tests:
The forward look is the one that catches barristers, because a single substantial brief can trigger it on its own without the rolling 12-month figure ever going near the threshold. Once registered you are automatically inside Making Tax Digital for VAT — every VAT-registered business is signed up, and there is nothing further to do about that particular obligation.
A self-employed barrister is a sole trader, so Making Tax Digital for Income Tax applies directly: from 6 April 2026 where qualifying income exceeds £50,000, tested on the 2024/25 return; from 6 April 2027 above £30,000, tested on 2025/26; and from 6 April 2028 above £20,000, tested on 2026/27. In scope, that means digital records and quarterly updates to HMRC rather than one return a year.
The contrast is worth knowing, because it runs against the intuition. Partnerships and LLPs are not in scope of MTD for Income Tax and HMRC has not set a date for them, and a partner's share of partnership profits is not qualifying income for that partner's own test. So the equity member of the solicitors' firm instructing you may have no MTD obligation at all while you have a quarterly filing cycle — see LLPs and partnerships.
2023/24 was the transition year and every unincorporated business has been taxed on a tax-year basis since 2024/25. Transition profit remaining after overlap relief is spread over five tax years, 2023/24 to 2027/28, with at least 20% taxed in 2023/24 and the remainder spread equally over the following four. If your accounting date was not 31 March or 5 April you are still carrying an extra slice in 2026/27 and 2027/28.
And the part to know before you make a decision rather than after: if the business ceases on or before 5 April 2027, all remaining untaxed transition profit is brought into charge in the year of cessation. Retirement, a judicial appointment or a move in-house are all cessations. The date is worth choosing with the figure in front of you.
Chambers
A self-employed practice carries costs that look nothing like a normal small business: chambers contributions, clerks' fees, circuit and practice expenses, travel between courts, and equipment that has to keep working in a robing room. We prepare the practice accounts around them so the figures reflect how the practice is actually run, and so the position each year is comparable with the last.
Where a barrister or a set employs anyone — a personal assistant, administrative staff, junior clerks — employer's National Insurance runs at 15% on earnings above a secondary threshold of £5,000 a year, both applying since 6 April 2025, with the Employment Allowance at £10,500 for employers who qualify. Payroll, auto-enrolment and the real-time reporting HMRC expects are handled with everything else rather than sent somewhere separate — see payroll.
Finally, a point about incorporation, since it is asked often. Corporation tax runs at 19% on profits up to £50,000 and 25% above £250,000, with an effective marginal rate of 26.5% between those limits. Dividends taken out of a company are taxed at 10.75% and 35.75% at the ordinary and upper rates from 6 April 2026, both up two percentage points following Budget 2025, with the additional rate unchanged at 39.35% and the dividend allowance still £500. Whether that beats 42% or 47% as a sole trader depends entirely on how much you need to take out and how much can genuinely stay in. It is arithmetic, and we will do it on your figures rather than on a rule of thumb — the comparison calculator gives you the shape of it.
No client account, no Accounts Rules — the work here is timing, cash and getting the reserve right before January.
Accounts prepared on the right basis for your aged-debt profile, and the return filed early enough for the January figure to stop being a surprise.
Accounts and taxBoth instalment dates forecast in advance, with a reserve percentage set from your actual marginal rate rather than a round number.
The tax calendarRegistration timed against both tests, VAT returns filed, and the move to quarterly Making Tax Digital updates set up before it is mandatory.
Digital recordsA fee ledger that tells you what is genuinely collectable, what is stale and which solicitors take longest — as a number, not an impression.
Lockup calculatorFor a barrister or a set employing staff: payroll, auto-enrolment and real-time reporting, run alongside the rest rather than separately.
PayrollSole trader against a company, worked on your figures including the dividend rates that changed on 6 April 2026 — arithmetic, not opinion.
Structure comparedNo. Self-employed barristers are regulated by the Bar Standards Board rather than the Solicitors Regulation Authority, and a self-employed barrister does not hold client money in an SRA client account. The SRA Accounts Rules material elsewhere on this site — the five-weekly three-way reconciliation, the residual balance conditions, the annual SRA Accountant's Report — is written for solicitors' firms and does not apply to chambers or to your practice. We act for barristers on the accounting and tax side: the practice accounts, the self assessment return, VAT, payments on account, Making Tax Digital and payroll where you employ anyone.
Payments on account. Self assessment instalments fall on 31 January and 31 July and are set by reference to the year just filed, so in your first year of practice there is no prior year and nothing is collected at all. The following 31 January then brings the whole of the first year's liability plus a first instalment towards the year you are already halfway through, with a second instalment on 31 July. If year two is bigger than year one, the January after that adds a balancing payment on top of the instalments already made. Two consecutive Januaries each exceeding a full year's tax is the normal shape, and it is entirely forecastable.
There are two separate tests and the second is the one people miss. The backward look: at the end of every month, total your taxable turnover for the previous 12 months. If it has exceeded £90,000, you must register within 30 days of the end of that month, and registration takes effect from the first day of the second month after the breach. The forward look: if at any point you expect to exceed £90,000 in the next 30 days alone, you must register by the end of that 30-day period and registration takes effect from the date you formed that expectation. For a barrister a single substantial brief can trigger the forward test on its own.
Yes, and directly, because you are a sole trader. Making Tax Digital for Income Tax applies from 6 April 2026 where qualifying income exceeds £50,000, tested on your 2024/25 return; from 6 April 2027 where it exceeds £30,000, tested on 2025/26; and from 6 April 2028 where it exceeds £20,000, tested on 2026/27. In scope you keep digital records and file quarterly updates. It is worth knowing that the position is the opposite for the equity partners instructing you: partnerships and LLPs are not in scope, no date has been set for them, and a partner's share of partnership profit is not qualifying income for their own test.
It changes which tax year a fee falls into, which for a practice with long aged fee notes is not a technicality. Under the cash basis, a fee is taxed in the year it is actually paid. Under the accruals basis, it is recognised when the work is done and billed, so tax can fall due years before the money arrives. Separately, basis period reform moved every unincorporated business to a tax-year basis from 2024/25, and transition profit after overlap relief is spread across 2023/24 to 2027/28. If your old accounting date was not 31 March or 5 April, you are still carrying an extra slice this year and next.
A free conversation about your reserve, your aged fee notes and your VAT and MTD position. We act across the legal profession, and we are clear about where the solicitors' rules stop and yours begin.
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