ABSs and entitites: Dual-practice – employment as a consultant
There is now an increasing variety of ways in which barristers can offer their services. These will have their own accounting and tax treatment. It is important to double check with an accountant that you are dealing with your fees in an appropriate way.
Do be aware that you may be considered to be an “employed barrister” for the purpose of BSB regulation, but your income may fall to be taxed as arising from “self-employment: the definition of ’employed barrister’ includes a practising barrister who is employed “under a written contract for services which is for an indeterminate period…….”
Fees from employment as a consultant will typically be treated in the same way as any of the other fees that you receive. The difference is that they will most likely be paid to you directly rather than through Chambers. It is up to you to ensure that you issue the appropriate invoices, receipts and admittance advices to your client. The fees will be part of your taxable income.
Guidance on the taxation of income derived from work done or through entities is currently under consideration by the Bar Council’s Taxation Panel and will be published later this year.
The BSB has not yet begun to authorise non-lawyer entities (‘Alternative Business Structures’).