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As a self-employed hairdresser or barber, there are a few things to consider when it comes to paying your taxes:
Luckily for you, we don’t believe in struggling your way through the government gateway to confusion and dread. Whether you’re self-employed working in a salon or self-employed working privately, you’ll need to declare your income to HMRC.
As with any other sole trader, you must first declare to HMRC that you are self-employed. This is done through a Self Assessment. It’s basically the way to declare untaxed earnings by explaining where you work, how much you’re paid and how often.
You must register for Self Assessment by 5th October of any given tax year.
When it comes to actually paying your bill, you’ll need what’s known as a Unique Taxpayer Reference (UTR) number. HMRC will send this in the post for you once you’ve completed your Self Assessment.
The deadline to pay your tax bill is 31st January, the year following the tax year you’re paying for.
The tax year is from 6th April to 5th April – just to be difficult.
If you earn money hairdressing between May 2023 and April 2024, you’ll pay a tax bill for the 2023/24 tax year.
This payment will be due by 31st January 2025.
To pay your tax bill, you’ll need to show evidence of your income and any expenses that you’d like to deduct. We’ll come onto what you can expense a little later in the guide but until then, just know that it’s super-important that you make a record of everything that you earn and spend.
Whether that’s by invoicing, making spreadsheets or uploading your receipts onto an online platform, it’s all of paramount importance. HMRC can request evidence of your income and expenses up to 22 months after you pay your tax bill.
Once you’ve got everything ready and prepared, there are a few ways to pay:
You can pay by Direct Debit (if you’ve set it up with HMRC before), BACS, with your debit/credit card or by cheque.
What you owe depends on what you’ve earned. Generally, there are three types of tax to be aware of:
Income Tax is variable, depending on how much you earn. Take a look at the 2023/24 tax year salary thresholds.
Class 2 and Class 4 National Insurance is paid when you earn over £6,725 and £12,570 a year respectively from self-employment income.
As a self-employed hairdresser or barber, you can expense any spend related to your business. Here’s a list of common expenses for hairdressers who work as sole traders, but you can expense anything that relates to your business. Just make sure that you have evidence to prove it!
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