Chair rent, colour and product stock, cash tips and retail sales. Here's how Making Tax Digital for Income Tax applies to hairdressers, what records you need, and when it starts for you.
MTD for Income Tax phases in by gross income before expenses. Lots of chair-renting hairdressers sit between £30,000 and £50,000, so April 2027 is the step that brings most into scope.
Renting a chair makes you a business owner. Record your full takings and claim the chair rent as an expense, so you're taxed on what you keep. Our chair and room rent guide explains 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.
Record your takings and your chair rent separately so your quarterly figures show what you actually keep.
Rent you pay the salon is deductible. Record your takings and the rent so you're taxed on what you keep.
Tips are taxable income. Log them as you go so your quarterly figures are complete and accurate.
Colour and salon products are deductible. Snap the receipts so your expenses stay complete.
Selling products is income; the stock you buy is an expense. Record both so you're taxed on the margin.
Renting a chair makes you a business owner. Clear Books keeps your takings, tips and stock tidy and gives HMRC exactly what MTD needs, whenever you're in scope.
Record takings, tips and stock as you go, watch your gross against the thresholds, and be ready to submit when your wave lands.
