Lawcast 199: Ashley Hayman on taxation and tax planning for Barristers
Today I am talking to Ashley Hayman, senior partner of Cassons for Counsel Chartered Accountants, about certain peculiarities that relate solely to barristers and which are not always picked up by non bar specialist accountants.
1. Compliance matters – there are certain peculiarities that relate solely to barristers and which are not always picked up by non bar specialist accountants. Barristers need to know to watch out for it!
a. For their first 7 years, barristers are taxed on the cash basis as opposed to the earnings basis (ie what they are paid as opposed to what they bill).
b. They are then subject to a catch up charge for any unpaid tax once they reach 7 years. This can be spread over 10 years – the spreading charge.
2. Watch out also for changes to the late penalty regime. We know of barristers who pay estimated amounts for the tax bill but who have not submitted a tax return. So far there has been no penalty as tax has been paid. The regime changes for April 2012 when both tax return and tax payment have to be submitted on time otherwise penalties will be incurred.
3. Tax efficient planning
b. VCTs (Venture Capital Trusts)
c. EIS (Enterprise Investment Schemes)
e. Choice of year end date
f. Tax efficiencies via Chambers (eg TPAs – see Ashley Hayman’s article in Counsel)