Beauty Therapists – what expenses can I claim?
About the industry
There are more than 43,000 hair and beauty businesses in the UK.
The hair and beauty industry generated over £7.5bn in turnover for the UK economy.
The average Beauty Therapist makes between £18,000 and £50,000 per year.
What income should I track?
As a therapist, you might work as a freelancer (so self-employed), for a company (getting paid through PAYE), or a mixture of the two. This will determine how you track your income, or if you need to at all:
I get paid via a payslip (PAYE)
When you’re paid solely through PAYE and make no extra money via self-employment, you (probably) don’t have to file a Self Assessment (otherwise known as a tax return). Check out more rules here.
I get paid as a sole-trader
If you work solely as a freelancer, and don’t earn any money via a PAYE job, you’ll definitely need to report your income to HMRC and do a Self Assessment (unless it’s £1000 a year).
I’m a freelance beauty therapist and employed by a company
If you have both PAYE income as well as self-employed income, you’ll need to tell HMRC about both. Your tax rate is determined by your total income during the tax year. We know that working out tax when you have multiple sources of income can be confusing – but don’t worry, we’ve got you covered with this helpful guide.
What expenses are business expenses?
As a self-employed beauty therapist, you will have expenses.Your expenses range from equipment, to seat rental at a salon, to website costs and insurance. It is important to keep records of these transactions throughout the tax year.
To get you started, Finmo has compiled a list of common and eligible business expenses for freelance beauty therapists to claim when completing their Self Assessment.
Beauty Therapist Equipment
As a freelance beauty therapist, you’ll use a range of equipment for your job. The below isn’t an exhaustive list, but when buying this equipment wholly and exclusively for work (so not for personal use), you can claim it as a business expense:
Treatment couch
Hair removal equipment
Beauty products
Moisturisers
Cotton wool
Disinfectant wipes
Oils
Manicure & pedicure products
Brow & lash tint
Tanning supplies
Additionally, clothing bought wholly and exclusively for use as a Beauty Therapist is a business expense.
Office, Property & Equipment
Almost all sole-traders and self-employed people work from home in some capacity. Whether your office is your home and clients come to you, or you compile your books and file your Self Assessment from home, some of your home can be written off for business purposes.
Head to our article to find out more about what expenses you can claim from home.
Travel, Subsistence & Entertaining
If you find yourself travelling away from your usual place of work to meet a client, there are expenses you can claim.
First off, if you drive a car for work purposes, you can claim mileage to write the cost of this off your tax bill.
Head to our article, ‘What mileage can I claim for work?’, to find out more.
Next, there may be expenses you can claim related to ‘subsistence’ – aka the stuff you buy while traveling for work. This includes things like food, travel costs (trains / planes / taxis, etc.), hotels, and other ad hoc expenditures are considered subsistence.
When it comes to entertaining, the news is not so great. HMRC has cut down significantly on entertainment expenses, putting almost a complete stop to expensing these – even when that entertainment might mean winning a new contract, for example.
Head to our article on what food and drinks expenses you can claim to find out more.
Marketing, Subscriptions & Training
Facebook and Google count themselves among the most valuable companies in the world because they allow businesses to find customers. Finding customers is one of the hardest and most expensive business activities in today’s environment. Marketing your business to acquire customers is a business expense.
Marketing is made easier when you have a great product. In the beauty industry, your clients are your product. You know staying on top of industry changes and your craft is important. Subscriptions and memberships to industry-specific groups are business expenses.
As with subscriptions, training and educational programs ensure you know the trends and have the skills to say yes when your clients ask.
Legal & Financial
Any financial or legal costs associated with your business are considered a business expense. This can include things like interest paid on a loan taken out solely for the purpose of your business or bank charges related to your work. You might also need to hire an accountant or to purchase business software to help you sort your income and expenses and handle your taxes (we can help with that).
Finally, it may be the case that some of your clients require you to take our certain types of insurance cover before they’ll agree to work with you, which again, you can write off as a business expense.
Head to our article on what insurance freelancers might need to find out more.
The smart way to handle sole trader tax
Tax stuff can be hard to get your head around, especially when you’ve got multiple sources of income. Our tax experts are here to help – with one of our plans you can pick the brains of our accredited accountants and have your Self Assessment fully reviewed too.