The Ten Thousand Pound Ceiling

The choir of Beauvais Cathedral is the tallest Gothic vault ever built, at just over 48 metres.

It is also, in a sense, a ruin. The vault collapsed in 1284, twelve years after completion. It was rebuilt with additional piers. A tower was added in the sixteenth century, briefly making Beauvais the tallest structure in the world, and it fell down in 1573. The nave was never built at all. What stands today is a transept and a choir, attached to nothing, with a small remnant of the older church still bolted onto the western end where the rest of the cathedral was supposed to go.

They kept building higher until the structure refused.

Doing better makes it worse

The annual allowance is the amount that can go into a pension each year with tax relief. For 2026/27 the standard figure is £60,000.

For higher earners it tapers. Two tests have to be met. Threshold income, broadly your net income less personal pension contributions, has to exceed £200,000. Adjusted income, which adds back pension inputs, has to exceed £260,000. If both are breached, the allowance falls by £1 for every £2 of adjusted income above £260,000, until it reaches a floor of £10,000, which is hit once adjusted income passes £360,000.

So a junior building a practice has £60,000 of headroom. A silk in a strong year has £10,000.

The consequence is that the years in which you can most easily afford to fund a pension are the years in which you are least permitted to. And because there is no employer contribution at the self-employed Bar, that ceiling is the whole of your provision, not a supplement to something an employer is doing anyway.

Carry forward is the mechanism that helps

Unused annual allowance can be carried forward from the previous three tax years. You use the current year's allowance first, then the oldest of the three, working forwards. Anything not used within four years is lost.

This matters more at the Bar than almost anywhere else, because income here is lumpy in a way that salaried income is not. A quiet year with a tapered allowance you didn't use, followed by a receipts-heavy year, is exactly the pattern carry forward exists to smooth. The catch is that it requires knowing where you are, and the Bar has historically found that out in arrears.

There is a second limit worth knowing. Tax relief on personal contributions is capped at your relevant UK earnings for the year, which for a barrister means profit rather than receipts. Carry forward can give you allowance; it cannot give you earnings. In a genuinely lean year the earnings cap may bind before the allowance does.

The thing that has changed

Until this year, sizing a contribution against the taper meant estimating your own income and hoping. Adjusted income is not a figure that appears anywhere until the return is done.

Making Tax Digital changes that. From April 2026 a quarterly picture of income and expenditure exists, four times a year, whether you asked for it or not. By November you have two quarters of actual figures and a reasonable idea of where the year is heading. That is not a precise adjusted income calculation, and it doesn't include everything the taper tests require. But it is a great deal better than the position in which most of the Bar has made these decisions until now, which is to say the following January.

The tapered allowance is a ceiling that lowers as you rise. It is worth knowing roughly where it sits before you reach it, rather than after.

This article is general information based on legislation in force at the date of publication, which may change, and is not personal advice. Individual circumstances differ considerably, and the tapered annual allowance calculation depends on figures specific to you. The value of investments can fall as well as rise and you may get back less than you invest.

Altor Wealth Management LLP advises barristers and other self-employed professionals from our offices in Hook, Hampshire, and across Surrey, Berkshire, Sussex and Kent.