Room rent, treatment packages and courses sold upfront, product stock and gift vouchers. Here's how Making Tax Digital for Income Tax applies to beauty therapists, and when it starts for you.
MTD for Income Tax phases in by gross income before expenses. With packages, products and treatments, your gross income can add up across the year.
Renting a room makes you a business owner, unlike a salon-employed therapist. Record your takings and claim the room rent as an expense, so you're taxed on what you keep. Our chair and room rent guide covers the status question.
When you're in scope, your annual Self Assessment return is replaced by four short quarterly updates and a year-end final declaration, all through recognised software.
Keep prepaid packages and vouchers tracked so the timing of income is clear each quarter.
Renting a room is deductible. Record your takings and the rent so you're taxed on what you keep.
Courses paid upfront need recording consistently so quarterly updates stay accurate. Clear Books keeps them organised.
Track vouchers so the timing of income is clear, usually when redeemed for a treatment.
Products and consumables are deductible; retail sales are income. Record both so you're taxed on the margin.
Prepaid income and product stock can be fiddly to track. Clear Books keeps it organised and gives HMRC exactly what MTD needs, whenever you're in scope.
Record treatments, packages and rent as you go, watch your gross against the thresholds, and be ready to submit when your wave lands.
