If you’re a hairdresser working as a Sole Trader in the UK, it can be a little confusing when it comes to your Self Assessment with the HMRC and knowing exactly what you can and can’t claim back as expenses.
1. Materials
With the market being full of various hair products which vary based on price, quality, its’ chemical formula, etc. you are faced with a simple, yet hard choice – Choose a more affordable line hair care products, but not be sure of its quality and how it interacts with different types of hair, or a more expensive one, with which you have previous experience and its quality being assured. Given the current economic situation, while hard to admit, you most likely will opt for the cheaper line, in order to cut your costs. But, what if you could buy the best ones? Since you are able to claim these products as an expense, for every £3,000 invested, you are able to save £600. Doesn’t seem like a hard choice anymore, right? Surely your customers will be much more satisfied as well!
2. Equipment
Scissors that get dull after a week of cutting, blow dryers that sound like they will begin blowing fire after a few seconds of working, and brushes that collected so much hair that they are impossible to clean anymore. Investing £360 in higher quality and better equipment will not only save you time and money in the long run, since you won’t have to replace them as often, but also save £72 in tax.
3. Training costs
Hairstyle trends change so often that it is almost impossible to keep up with them and the techniques required to perform them on your own. Avoid the free youtube tutorials and experimenting on your clients, and invest £300 in proper training by professionals. Not only do you gain new knowledge, but also £60 tax savings for every £300 invested.
4. Hair magazine subscription
Despite all your efforts, it is close to impossible to keep a tight schedule going correctly and on time, since just 5 minutes being late by your second client can offset your 8th appointment by more than 40 minutes. This means that you will have clients waiting on their appointment for quite a while in the waiting room, and unless they have something to do, they will become quite furious. Ease the process and provide them reading material so they don’t notice the waiting time. Subscribe to a hair magazine for £70, keep your clients entertained, and save £14 in tax.
5. Insurance
While uncommon, accidents can still occur while giving a haircut. In order to be able to provide the best care and service for either you or your client, invest £60 in insurance and save both £12 in tax and the nerves you would spend worrying about potential problems.
6. Chair rental
Before you build up your business and client base large enough to open your own salon, chair rental in a studio is a great option for getting started. By investing £2,400 in chair rental in an already established studio, you not only save £480 in cost, but also save much more by not spending on opening and equipping a studio, utility costs, and so much more. Plus, you can always change your place of work, making this a great starting point!
So, there you have it. 6 ways to save money every year on your taxes if you’re a UK Sole Trader. And to make keeping track of all your expenses even easier, 1Tap Receipts exports all of the key data from a simple photo of your receipt meaning you’ll never have to type out another receipt again when claiming back expenses.
