ÀÏ˾»úÎçÒ¹¸£Àû

Solicitors and barristers ― income recognition

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Solicitors and barristers ― income recognition

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

This guidance note covers the different types of contractual conditions under which solicitors or barristers earn income and when that income is recognised for accounting and tax purposes. Except where the business uses the cash basis to calculate the taxable profits, the starting point is the requirement to calculate profits in accordance with generally accepted accounting practice (ITTOIA 2005, s 25). HMRC therefore considers that the tax treatment depends on the correct application of GAAP to the facts and circumstances.

Professional income can arise from the following contractual conditions:

  1. •

    continuing service contracts, which are continuous engagements advising clients ― under these contracts the professional firm performs work on an ongoing basis throughout the compliance period

  2. •

    one-off transactional contracts, which are single standalone transactions, where invoices are issued on completion of the task

  3. •

    contingent fees, where the level of the fee is determined by a third party event; under such arrangements the firm’s fees are often set so that they would obtain no reward if the venture is unsuccessful

  4. •

    retainer fees, where

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

Powered by

Popular Articles

Short-term business visitors (STBVs)

Short-term business visitors (STBVs)What is a short-term business visitor?An STBV for UK tax purposes is an individual who performs duties for a non-UK employer and as a part of those duties has been asked to spend a short period working in the UK. There is a common misconception that there is

14 Jul 2020 13:40 | Produced by Tolley in association with Gill Salmons Read more Read more

Indexation allowance and rebasing

Indexation allowance and rebasingThis guidance note explains the general rules surrounding the availability of indexation allowance (which was frozen at December 2017) on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview

14 Jul 2020 11:59 | Produced by Tolley in association with Jackie Barker of Wells Associates Read more Read more

Interest on late paid tax

Interest on late paid taxIntroductionInterest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.Harmonised legislation was introduced in 2009 to:•set statutory

14 Jul 2020 12:00 | Produced by Tolley in association with Philip Rutherford Read more Read more