By now I am sure that you will be aware that the Bar Council has now approved the changes to allow practicing Barristers to provide their professional services via a Limited Company.
The major advantage to operating through a Limited Company is that the Company pays Corporation Tax at the rate of 20% on its profits and that you can then extract those profits from your Company in a more tax efficient manner, reducing your exposure to the highest rates of Income Tax and National Insurance contributions.
The new Regulations require all Shareholders to be qualified Barristers but it is understood that in the foreseeable future these regulations will be relaxed to allow non-Barrister ownership enabling spouses to become Shareholders.
The decision as to whether or not to Incorporate is probably going to be the biggest single decision that a Barrister will make since becoming a Tenant in your Chambers. It should not therefore be entered into lightly since whilst there may be short term advantages there will be a significant increase in both the regulatory and administrative burden associated with operating a Limited Company and the longer-term issues as to how funds are extracted.
On a broader note, Incorporation will in due course allow the Profession to operate as a larger commercial entity enabling not just Barristers but Clerks, Administrators and other Professionals to be working Shareholders.
Here at Jack Ross we have over 50 years of experience of advising Members of the Bar and their Chambers on tax and regulatory issues. We are now able to offer balanced and considered advice as to whether Incorporation presents an opportunity to benefit financially not just in the short, but in the medium and long term – download a copy of our detailed report on the pros and cons of barrister incorporation.
If you wish to discuss barrister incorporation in more detail please do not hesitate to contact the Jack Ross team on 0161 832 4451 today.