Are you in? It’s your takings, not your profit
Add up everything clients paid you in the 2025/26 tax year – cuts, colours, blow-dries, extensions, bridal hair, retail products and tips – before taking off chair rent, colour or mileage. If that figure (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 and colour – card, cash or bank transfer | Sales / turnover | Record the full price on the day, including cash. |
| A client takes home a bottle of shampoo you sell | Turnover – retail sales | Add it to your takings; the cost of the stock is an expense. |
| The salon’s booking system pays you weekly after taking its fee | Gross income + an expense (fees) | Record what the client paid as income and the fee as an expense. |
| You pay the salon owner your weekly chair rent | Allowable expense – rent | Keep the invoice or bank record. |
| You restock colour, developer and foils at the wholesaler | Allowable expense – cost of materials | Photograph the receipt into your app the same day. |
| You drive to a client’s home for a bridal trial | Business mileage – allowable expense | Log the miles; claim 45p a mile for the first 10,000. |
| You transfer money to your personal account for the mortgage | 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 hairdresser claim?
✓ Usually allowable
- Chair or room rent, or salon rent, rates and utilities if you run it
- Colour, developer, toners, foils and treatments used on clients
- Retail stock you sell on to clients
- Scissors, straighteners, dryers, clippers and their repair
- Gowns, towels, capes and laundry
- Booking software, card reader fees and payment app charges
- Public liability and treatment insurance
- Refresher and technical courses on skills you already use
- Mobile hairdressers: business mileage, or the business share of van/car costs
- Business share of your phone and social media advertising
✗ Not allowable
- Your own haircuts and colour, even if they show off your work
- Everyday clothes worn at the salon
- Travel from home to the salon where you normally work
- Lunches and coffees during the day
- Parking fines
- Money you take out for yourself (drawings)
Rules that matter for hairdressers
Chair renter, commission or employee?
Renting a chair for a fixed fee, setting your own prices and keeping your own client list usually means you are self-employed. If the salon sets your hours and prices and pays you a percentage, you may be an employee. HMRC’s Check employment status for tax tool can help you work out which.
Training to be a specialist
A course that refreshes skills you already use – a new colour technique, for example – is normally allowable. A course that gives you a whole new skill or qualification, such as becoming a trichologist, usually is not.
Mobile hairdressers and the car
For each vehicle you choose either the mileage rate (45p a mile for the first 10,000 business miles) or the actual costs of running it, not both. Trips between clients count; a weekend trip to the shops does not.
Worked example
Sophie rents a chair in a Bristol salon (illustrative example)
| Takings (turnover) | £38,500 |
| less Chair rent (£190 a week) | −£9,880 |
| less Colour, developer and treatments | −£3,900 |
| less Retail stock | −£1,200 |
| less Tools and electricals | −£650 |
| less Booking app and card fees | −£980 |
| less Insurance, training and laundry | −£840 |
| Profit | £21,050 |
| Income tax (estimate) | £1,696 |
| Class 4 National Insurance (estimate) | £509 |
| Total tax for the year | £2,205 |
| Put aside each month | £184 |
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 hairdresser: download the booking system or card reader report, add any cash from your daily notes, check chair rent is in for every week, and snap the wholesaler receipts you have been stuffing in your kit bag. Mobile? Add up the mileage log. Then press submit in your software, or hand it to your accountant. Little and often keeps it to minutes, not a lost day off.
| 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 hairdressers ask
Do tips count as income?
Yes. Tips you receive directly as a self-employed hairdresser, in cash or on the card machine, are taxable income and count towards the MTD threshold.
Can I claim the colour I use on my own hair?
No. Products used on yourself are personal, even if clients see the result. Only products used on clients or sold to them can be claimed.
I’m employed in a salon but do friends and family at weekends. Does MTD apply?
Your wages are not counted. 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 over the MTD threshold, MTD applies.
I own the salon and other stylists rent chairs from me. Is that rent my income?
Usually yes – chair rent you receive is part of your business takings, so it counts towards your turnover and the MTD threshold.
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.