XFC - Xero for Chambers overview

Xero for Chambers Information

Xero for Chambers - Reasons and Benefits for Chambers and Barristers

Sole traders earning above £50,000 must use HMRC-recognised software by 6 April 2026. Those earning above £30,000 follow in April 2027, and eventually, those above £20,000.

Instead of filing returns on HMRC’s website, digital records and compatible software are required. Quarterly updates and a Final Declaration by 31 January each year are mandatory.

VAT-registered sole traders have followed MTD for VAT rules since April 2019 for incomes above £85,000. As of April 2022, all VAT-registered businesses must use digital record-keeping and MTD software for VAT returns.

The VAT threshold increased to £90,000 on 1 April 2024. Earnings at or above this require VAT registration, and HMRC will sign you up for MTD.

Barristers can use our Xero for Barristers integration for VAT, ahead of April 2026.

Benefits of MTD for IT

Cloud-based MTD for VAT users have seen time savings, increased VAT confidence, and better financial control.

Additional benefits of MTD for IT:

Improved accuracy: Software reduces human error.
Better tax planning: Quarterly updates aid planning and cash flow management.
More manageable bookkeeping: Quarterly updates make returns a regular task.

Xero Definitions

Xero – independent accounting software, which Chambers use to manage their accounts.

Supplier – Xero term for an entity who supplies services, such as a Barrister who does work and requires a payment from Chambers.

Customer - Xero term for an entity who is being supplied with services, such as a Barrister who needs to pay rent or commission to Chambers. A barrister will usually be both a Supplier and Customer within Xero.

Expense – Xero's term for an amount outgoing from Chambers, such as a payment to a Barrister. This is not the same as the LEX Fee Code Type of ‘expense’, which refers to travel and accommodation expenses incurred by barristers.

Supplier Invoice/Bill – an Accounts Payable bill that Chambers owes to a Supplier (Barrister), such as a normal payment for work done on a case. XFC groups payments together into Supplier Invoices by LEX Case and LEX Tax Invoice Number.

Supplier Credit Note – an Accounts Payable credit that a Supplier (Barrister) needs to repay back to Chambers, such as a cancelled payment.

Sales – Xero's term for an amount incoming to Chambers.

Sales Invoice – an Accounts Receivable invoice that a Customer (Barrister) owes to Chambers, such as rent, commission or a Carter Liability to be paid to another barrister.

XFC Definitions

RAGFS – a Case being billed under the Revised Advocate Graduated Fees Scheme, as laid out by Lord Carter.

IA – Instructed Advocate, a Barrister who receives payments for Carter/RAGFS cases.

SA – Secondary Advocate, a Barrister who also does work for Carter/RAGFS cases. IAs subcontract work to SAs, and therefore owe them payments.

Carter Liability – on a RAGFS case, a liability amount owed by an IA Barrister to an SA for work the SA has done on the IA’s behalf. See below for details of how this works in XFC and Xero.

Payment Cancellation – a payment that has been cancelled within LEX, owed by a Barrister to Chambers.

Commission – an amount, based on a percentage applied to every payment, owed by a Barrister to Chambers. Barristers can have different commission rates from each other, and for different date ranges within LEX.

Commission Refund – a refund of commission, owed by Chambers to a Barrister. Used alongside a payment cancellation, or a Carter Liability recouped from an IA.

Rent – a monthly fixed amount, applied to all barristers regardless of the number of payments received. Barristers can have different rent rates from each other, and for different date ranges within LEX. Multiple months’ rent can be billed at once, but each month is only ever billed once.

Payment Summary Report – the report that generates the data that is used to create XFC bills and invoices in Xero.