Are you in? It’s your takings, not your profit
Add up everything clients paid you in the 2025/26 tax year – cuts, beard trims, product sales and tips – before taking off chair rent or anything else. If that total (plus any rent from property you let) is over £30,000, MTD applies to you from 6 April 2027. Over £50,000 and you have been in since April 2026.
Over £50,000
Over £30,000
Over £20,000
planned
Your work in accountant language
What actually happens in your working life, what your accountant and HMRC call it, and what to do about it.
| What happens | Accountant calls it | What you do |
|---|---|---|
| A client pays for a cut – cash, card or through a booking app | Sales / turnover | Record each day’s total, including cash. This is your income. |
| A client leaves a tip | Turnover (tips are taxable income) | Add cash and card tips to your takings. |
| The booking app pays you out after taking its fee | Gross income + an expense (fees) | Record the full price as income and the fee separately as an expense. |
| You pay the shop owner your weekly chair rent | Allowable expense – rent | Keep the bank record or a receipt. |
| You buy new clippers or a set of scissors | Equipment – deductible in the year you buy it (cash basis) | Keep the receipt; snap a photo into your app. |
| You move money from the business account to pay your own bills | Drawings – not an expense | Fine to do, but it doesn’t reduce your tax. |
| Every three months | Quarterly update | Your software sends HMRC your income and expense totals. |
| After 5 April | Final declaration | Confirm the year’s figures; tax is worked out and due by 31 January. |
What can a barber claim?
✓ Usually allowable
- Chair rent or shop rent, business rates and utilities (if you run the shop)
- Clippers, trimmers, scissors, blades and maintenance
- Products you use on clients and stock you sell on
- Capes, towels, neck strips, disinfectant and laundry
- Booking app subscriptions and card machine fees
- Public liability and equipment insurance
- Courses that keep your existing skills up to date
- Business share of your phone bill and social media advertising
- Mobile barbers: business mileage (45p a mile for the first 10,000 miles)
✗ Not allowable
- Everyday clothes, even if you only wear them at work
- Travel from home to the shop where you normally work
- Lunch and drinks during the working day
- Parking fines and penalties
- Money you take out for yourself (drawings)
Rules that matter for barbers
Tips are income
Tips paid to you – in cash, on the card machine or through an app – are part of your self-employed income. They count towards the MTD threshold and are taxed like any other takings.
Cash takings
Cash is where barbers most often get into trouble. HMRC compares turnover with similar businesses and card data. The simplest habit: note the day’s cash total before you leave, every day, in your app or a notebook you transfer weekly.
Chair renter or employee?
Renting a chair usually means you are self-employed – you set your prices, hours and keep your own clients. If the shop owner controls your hours, prices and takes a percentage, you may actually be an employee. HMRC’s Check employment status for tax tool can help.
Shop owners renting out chairs
If you own the shop, chair rent you receive from other barbers is usually part of your business income, and any staff you employ go through PAYE – that payroll is separate from MTD.
Worked example
Jay rents a chair in a Leeds barbershop (illustrative example)
| Takings (turnover) | £36,400 |
| less Chair rent (£175 a week) | −£9,100 |
| less Products and stock | −£1,600 |
| less Clippers, blades and tools | −£900 |
| less Booking app and card fees | −£1,100 |
| less Phone (business share) and Instagram ads | −£450 |
| less Insurance, training and laundry | −£780 |
| Profit | £22,470 |
| Income tax (estimate) | £1,980 |
| Class 4 National Insurance (estimate) | £594 |
| Total tax for the year | £2,574 |
| Put aside each month | £215 |
Estimate for 2026/27 using England, Wales & NI rates, assuming no other income. Scotland has different income tax bands.
What a quarterly update looks like
A typical quarter for a chair-renting barber: export your booking app report, add the cash takings from your notes, check card fees and chair rent are in, photograph receipts for products and tools – then press submit in your software, or let your accountant do it. Done weekly, it takes about 15 minutes; left to the deadline it can take a whole Sunday.
| Quarter | Period | Submit by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
| Final declaration | The whole tax year | 31 Jan following |
Quarterly updates are summaries – they don’t change when you pay. Tax is still due by 31 January (plus payments on account on 31 January and 31 July if they apply to you).
What will an accountant cost?
Typical monthly fees under MTD for Income Tax for: Sole trader, one business.
| Option | What you get | Per month |
|---|---|---|
| You do it yourself | MTD-compatible software. You keep the records and send the updates. | £0–£15up to £180 a year |
| Accountant files for you | You keep records in an app; they check them, send the 4 quarterly updates and the final declaration. | £30–£60about £360–£720 a year |
| Full service | They do the bookkeeping too – you share receipts and bank feeds, they handle the rest. | £60–£120about £720–£1,440 a year |
What pushes the price up: lots of transactions every month, or more than one income stream; records kept on paper rather than in an app; being VAT-registered; catching up on missed updates or late returns.
What a fixed-fee quote should include
- All 4 quarterly updates and the final declaration (your tax return)
- The MTD software licence – or whether you pay for it separately
- Whether they do the bookkeeping or only check what you’ve recorded
- A reminder before each deadline and an estimate of the tax to put aside
- Whether VAT (20%) is added on top – not every practice charges it
Accountancy fees for your business are an allowable expense, so they reduce your tax bill.
Indicative ranges from published UK price lists, checked October 2026. Not a quote – your fee depends on how many transactions you have, how tidy your records are and where you live.
Questions barbers ask
Do I really have to declare cash tips?
Yes. Tips you receive directly as a self-employed barber are taxable income and count towards your MTD threshold.
I’m employed in a shop but do a few cuts at home at weekends. Am I affected?
Your wages are not counted for MTD. Your weekend takings are – if they are over £1,000 a year you need to register for Self Assessment, and if they (plus any rental income) go above the MTD threshold, MTD applies.
Can I claim my clippers?
Yes. Under the cash basis, which most sole traders now use by default, equipment like clippers and chairs is deducted in the year you pay for it.
My booking app only pays me the net amount. What do I record?
Record the full amount the client paid as income and the app’s commission or fee as an expense. Your profit comes out the same, but your turnover – which decides MTD – is the full amount.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Work out your qualifying income for Making Tax Digital for Income Tax – GOV.UK
- Send quarterly updates using Making Tax Digital for Income Tax – GOV.UK
- Find software that works with Making Tax Digital for Income Tax – GOV.UK
- Penalties for Making Tax Digital for Income Tax – GOV.UK
This guide is general information about HMRC’s Making Tax Digital rules as of 26 October 2026, not tax advice. MTD Match is an independent introduction service and is not affiliated with HMRC. Check gov.uk or speak to an accountant about your own situation.