It is important when young, to live a little (or indeed a lot) since later in life such freedom is harder to come by. There are, however, a number of financial and accounting steps one should seriously consider in preparation for a life at the Bar. These loosely centre upon whether it is prudent to pay down debt, what to do with surplus cash, and what accounting considerations there are.

Dealing with debt

Ralph Emerson once said, ‘A man in debt is so far a slave.’ It is best to pay high interest debt such as credit cards as soon as possible, but the above is not a universal truth. For those who have even a modest attitude to risk it may be beneficial to retain debt. One needs to weigh up the immediate, tax free and guaranteed return of paying off one’s student loan or other personal debts against the uncertain, possibly taxed growth within an investment.

Protecting income

In times of long-term disability or illness and inability to work, normal expenses continue and the need to put aside monies for the future does not abate. That is where Income Protection Plans come into play. While a claim is very unlikely, it is sobering to reflect upon Aviva’s stats during 2020 when 43.5% of claims under these policies were made from those under 40.

When considering which set to join, ask whether they have any group benefits such as income protection. Although payment is made by the member, group discounts and more relaxed underwriting can be very attractive.

ISAs and pensions

ISAs provide tax free growth and immediate access. They come in two flavours: cash ISAs and equity ISAs. With interest rates so low, for anyone other than the most cautious, there is very little benefit in having a cash ISA currently and they are best used for investing into growth assets such as shares over the medium to long term.

Pensions are unquestionably one of the most attractive savings plans. The sooner one invests into a pension, the better – the government adds to every contribution you make, your tax bill will be reduced and the longer the term, the more that will accrue.

Accounting considerations

For most students the last thing on their mind when looking for pupillage is tax. However, decisions made now by students can have a significant effect on their future tax liabilities.

Most sets pay a pupillage award to students to cover both the first and second six. The award received during the first six is tax free and the award received during the second six award is taxable.

Review each chambers’ pupillage award and especially how the award is split across the first and second six.

You will need to register for self-employment from the start of your second six by completing a CWF1 form and submitting it to HMRC. (The exception to this rule applies if you do not hold yourself out to trade from the start of your second six.)

Once you are self-employed, annual tax returns need to be filed at HMRC and the associated tax paid with these returns twice a year. It is extremely important that you put money aside to pay your tax as you go along. Silver Levene, one of the biggest providers of accounting services to the Bar (and a firm we work with closely), suggest that during the early years you transfer 20-25% of your turnover into a separate interest-bearing account for the eventual payment of your tax bill.  

Once fees received exceed £85,000 per annum it is a requirement to register for VAT. However, at any time from the commencement of your second six one may request voluntary registration. Once registered, it is possible to reclaim VAT on any assets purchased four years prior to VAT registration, assuming the asset continues to be used for business purposes and that the original VAT invoice is held. Examples of an asset would be a laptop, printer desktop, wig and gown, and desk and chair. So the message is to keep the original VAT invoices as they may be of value in the future.

Note that from April 2022, once you are VAT registered, you will need to comply with new Making Tax Digital legislation. You will need to store your business transactions digitally and you will need to file your VAT returns using functionally compatible software such as Xero or QuickBooks.


As with most things in life, good planning pays rich dividends and the best time to plan is now. But don’t take that from a financial adviser such as me. Abraham Lincoln made no mention of HMRC, pensions or ISAs but he did remark, ‘Give me six hours to chop down a tree and I will spend the first four sharpening the axe.’