Interesting NIC

I was intrigued to read the article concerning interest on solicitors’ client accounts being treated as part of their trading profits rather than as interest received. (See Interest is part of the fee concerning Barnetts (a firm).)

My initial reaction was one of some alarm: had I been under-declaring my clients’ profits for Class 4 National Insurance contributions purposes for all these years?

However on reading the case a little more closely it does appear to have been decided on the particular facts surrounding the firm in question but nevertheless it would be reassuring to hear that the decision has no further effect on the majority of solicitors’ tax affairs.

Peter Taylor W. Rowland Waller & Co

Editorial note

To recap the decision of the First-tier Tribunal in Barnetts was that interest received on the client account...