Tax Tips for Beauty Salons & Aesthetic Clinics: What You Need to Know
Tax Tips for Beauty Salons & Aesthetic Clinics: What You Need to Know
Beauty is your thing—you’re passionate about making your clients feel amazing, which is why you decided to open your own salon. But let’s be honest, when you took the leap into business ownership, you probably didn’t give much thought to all the admin, paperwork, and that dreaded bookkeeping. Don’t worry, you’re not alone!
Taxes might not be the most glamorous part of running a salon, but getting them right can save you money and stress. Let’s break it down into some simple, actionable tips to keep your beauty business on track.
1. Know When to Register for VAT
If your salon is doing super well and your annual turnover hits £90,000, you’ll need to register for VAT. That might sound scary, but it’s not all bad news—you can reclaim VAT on the products and equipment you buy.
If you’re under the threshold but close to it, it might still be worth registering voluntarily, especially if you spend a lot on stock or equipment which you pay VAT on. If you’re VAT registered as a medical professional, offering medical treatments, some of the treatments may be VAT exempt but will still need including in your VATable turnover. This can be quite complex so be sure to reach out.
2. Claim Those Beauty Expenses
Did you know you can claim tax relief on loads of things you’re already spending money on? Think about:
- Rent and utility bills for your salon
- Hair dyes, nail polishes, make-up and all the other products you use for treatments
- Training courses for your team
- Even the fancy new chairs or mirrors you’ve just bought!
Keeping receipts and invoices is key here, so start a habit of snapping pictures of them.
3. Keep Track of All Your Income
Whether it’s money coming in from clients, product sales, or online bookings, make sure you’re recording every penny.
Using software like Xero or QuickBooks makes it so much easier, plus it keeps you compliant with Making Tax Digital (MTD). No more spreadsheets or panicking at tax time! Most software used in Salon’s is compatible to integrate with Xero and QuickBooks which means you’ll have more time for appointments and less time on admin.
At Bluebells Bookkeeping we use Dext to track expenses for the beauty salons and aesthetic clinics that we look after. This means our business owners can concentrate on making their clients look beautiful whilst we handle the paperwork.
4. Separate Your Personal and Business Finances
Mixing your business and personal money is a recipe for stress (and messy books). Get yourself a business bank account—it’ll make tracking your finances so much easier and keep everything neat and tidy for tax time. Plus, if you’re a limited company it’s a legal obligation.
5. Staff or Subcontractors? Know the Difference
Got a team of stylists or therapists? Great! But make sure you know whether they’re employees or self-employed contractors, as the tax rules are very different.
And if you’re paying staff, don’t forget about PAYE and National Insurance—those aren’t optional!
6. Don’t Miss the Deadlines
The tax year runs from 6 April to 5 April, and the big dates you need to be aware of are 31st January (that’s when your self-assessment tax return is due to be filed and paid) and 31st July (that’s when your payment on account is due to be paid).
If you’re VAT registered, you’ll have quarterly returns too and if you have a team you’ll also have PAYE deadlines. There are a lot of deadlines to keep track of and ensure you don’t miss them as otherwise you’ll be handed a nasty fine.
Top tip: Set reminders on your phone or work with a bookkeeper to avoid any last-minute panic.
7. Take Advantage of Tax Reliefs
Thinking of upgrading your salon with new equipment? The Annual Investment Allowance (AIA) means you could claim tax relief on it. If you’re an aesthetics salon you’ll have equipment that doesn’t come cheap. If it meets the criteria it may mean you get some help along the way.
8. Plan Ahead for Your Tax Bill
Nobody likes an unexpected tax bill. Put aside a percentage of your monthly income so you’re prepared. Even better, open a separate savings account or savings space for tax payments. It’ll make life so much easier. We recommend filing your tax return as early as possible so you’re aware of how much money you need to put aside.
9. Stay on Top of Trends
Being competitive is key in the beauty industry so make sure you’re aware of the latest products and trends. If you’re introducing new services like subscriptions or selling gift cards, make sure you understand how they affect your taxes. Keeping up with these changes will save you from headaches later on.
10. Work With a Bookkeeper
Let’s face it—running a salon is full-on, and you’ve got enough on your plate. That’s where we come in! At Bluebells Bookkeeping, we specialise in helping beauty businesses just like yours. From keeping your books in order to making sure you’re claiming allowable expenses, we’re here to take the stress out of your finances.
Finances don’t have to be terrifying, and with the right support, you can spend less time worrying about them and more time doing what you love—making your clients look and feel fabulous.
Ready to take the pressure off? Get in touch with Bluebells Bookkeeping today—we’d love to help you simplify your salon’s finances.
