How much should I put aside for taxes?

How much should I put aside for taxes?

We cannot recommend strongly enough that you put away a proportion of your income on a regular basis to save up for your tax. You should transfer funds on a regular basis to a separate interest bearing bank or building society account for this purpose.

It helps to know, of course, what proportion of your income you should put away. This cannot be estimated accurately without reference to your personal circumstances because each individual’s financial position is different. As your fees increase, the tax and national insurance bands change and personal tax allowances may be used up by other income. Business expenses (including clerks’ and chambers’ costs) are different for every barrister.

We advocate using a rule of thumb guide to redirect your fees into a tax savings account. This tax savings account should be used to accumulate funds for the payment of your income tax, national insurance and VAT liabilities as they fall due. We will work out a rule of thumb percentage that you can apply to your income, which is appropriate to your personal circumstances.

This answer was last checked May 2017. This answer is for general guidance only. It provides an outline, and may not include points which are important in your case. You should not rely on this answer without taking individual advice based on the full facts of your case. The information given was correct at the time of release.