Here at Team4 HQ we’re in awe of the work that hairdressers do. Not only do you need to have the technical skill to cut someone’s hair in a way that suits their style and personality, you also need to put them at ease and ensure they feel comfortable from anywhere from 30 minutes to 2 hours while they’re in your chair.
While you’re busy looking after your customers, do you give yourself to think about the future of your business. Are you a mobile hairdresser? Do you rent a chair within an established salon? What do you want for the future – to set up your own premises? Or perhaps partner up with someone else?
We know it sounds boring, but taking care of your financial records as you go along will give you a clearer picture on what you can afford to do. It will also reduce your stress levels so you have more time to think ahead.
If you’d welcome some tips on how to on top of your annual tax returns, read on.
1/ Know what business expenses you can claim
Money you spend on your hairdressing work is a legitimate business expense and can go towards reducing your tax payments. Did you know that how you work makes a difference to what you can claim?
As a mobile hairdresser: make sure you claim for mileage / fuel costs when going out to visit customers.
If you’re renting a chair: make sure you claim for your rental costs – this is essentially the same as renting an office, so these costs are allowable expenses.
If you work from home: you can include a percentage of your mortgage or other costs of running your home as long as it’s proportionate to the space you use (e.g. one room) and the time it’s in use for work (e.g. 3 days per week).
Expenses anyone can claim
- Tools & equipment (scissors, hair dryers, styling products)
- Business related insurance
- Mobile Phone – Business Use
- Trade magazines and subscriptions
- Bank charges on business account
- Accountancy & bookkeeping fees
2/ Keep your paperwork organised
In order to claim your expenses you must keep records of your receipts. You must also keep copies of all invoices or payments you receive from customers. A whole year’s worth of paperwork can easily turn into a mountain, so filing things away as you go makes it easier to do your return.
There are some really easy to use apps that allow you to keep digital records, with each invoice or receipt attached to the right transaction. A bookkeeper can help you get this set up on your phone so you never have to worry about losing paperwork again.
3/ Always file your return in plenty of time, even if you’re worried about the tax bill
If you know you tend to put things off, it’s really worth asking for some help rather than sitting on it and letting it worry you. The penalties for filing your tax return late quickly pile up. However once you’ve submitted your return, the penalties for late or partial payment are much smaller.
It’s also worth noting that the earlier you file your tax return, the sooner you know what your tax bill is, meaning you can budget for it more easily. Knowing your figures is often a lot less stressful than wondering or worrying and not being able to do anything about it.
Enjoy the work you love doing
We understand that being self employed often means you can’t afford the same accountancy support as a big salon. A little help, however, can often go a long way and help keep you on track.
We work flexibly, so we can help you with simple and effective systems to keep your paperwork up to date, meaning you can save money by looking after your own bookkeeping. We can also help with making sure your expenses get put through correctly and following HMRC’s requirements.
If you’re looking for ways to make your bookkeeping simpler we’re always happy to have a friendly chat: call us on 01825 763378 or email email@example.com.
Featured photo by Aw Creative on Unsplash