Running a salon means juggling appointments, products, staff and takings. An accountant for salons in the UK keeps the numbers as organised as your diary.
Do salons need to register for VAT?
Yes, once taxable turnover passes £90,000 in any rolling 12 months. Most haircuts, colouring and beauty treatments are standard-rated at 20%, so you either add VAT to prices or absorb it. Registering voluntarily earlier lets you reclaim VAT on equipment and fit-out costs.
Are your stylists employed or self-employed?
HMRC looks closely at this. Genuinely self-employed stylists rent a chair, set their own prices and bring their own clients. Staff paid commission under your direction are usually employees, so you need payroll, National Insurance and minimum wage compliance. Eligible employers may claim up to £10,500 of Employment Allowance against employer National Insurance.
What can a salon claim as expenses?
Products and consumables, rent, rates, utilities, insurance, equipment such as chairs, basins and beds (often with capital allowances), uniforms, training, booking software and card fees. Keep receipts for each.
How should salons handle cash, cards and tips?
Use an electronic till or booking system, bank takings daily and reconcile weekly, because cash-heavy businesses attract HMRC attention. Since October 2024, employers must pass card tips on fairly to staff and keep a written tips policy.
FAQ
Is chair rental income taxable?
Yes. Rent received from self-employed stylists is taxable income for the salon owner and can affect your VAT position.
Do beauty salons charge VAT on treatments?
Once VAT registered, most beauty treatments are standard-rated at 20%.
Can a mobile hairdresser claim travel costs?
Yes. Travel between clients is generally allowable, but ordinary commuting is not.
Should a salon be a limited company?
It can help once profits are consistently high, but it adds admin. Compare both structures before deciding.
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