All content provided in this article is for informational purposes only. It is recommended to speak with your own accountant, solicitor and/or business advisor before undertaking any of these points. Please note that some of these points apply to UK salons only. For more information on US or Irish equivalents please speak to an expert.
None of us like paying tax do we? But you’d be amazed how many salon owners pay far more than they need to just because they don’t follow these simple 7 steps. Have a look at these salon tax tips and you’ll see just how easy it is to save enough to make a real difference.
Salon Tax Saving Step Number 1 … Don’t lose your receipts.
It sounds obvious doesn’t it! But believe it or not, more and more salon owners I meet are buying supplies and bits and bobs for the salon, using their own money and they don’t reclaim the cost from the business. It sounds crazy but it’s happening all the time.
Here’s the answer … Get yourself an Expense tray and an expenses form.
Whenever you buy ANYTHING for your salon out of your own pocket, keep the receipt, put it the expenses tray and reclaim the amount monthly. To do this, just fill in your expenses claim form, total up the value of all the receipts and transfer the money from the business to you. Then send the form and receipts or paid invoices to your accountant. If you’d like an example of our Expense form, please email me and I’ll send you one.
Here is your very own Business Expense Claim Form PDF that you can download and use for your own salon, courtesy of CDC Accounting.
Salon Tax Saving Step Number 2 … Claim for your business mileage.
If you’re nipping here there to buy supplies and bits and bobs for the salon then be sure to make a note of your mileage – believe it or not you can claim 45p per mile for the first 10,000 miles you do and 25p for all miles over 10,000.
Here is your very own Mileage Claim Form PDF that you can download and use for your own salon, courtesy of CDC Accounting.
Here’s the answer …
Get a mileage form from me.. email me.. then on every trip complete the form and then add it to the expense form monthly and repay yourself.
Salon Tax Saving Step Number 3 … Offset your losses.
Hopefully you didn’t … BUT… if you made a loss last year make sure that it’s brought forward by your accountant, because you can offset them against future profits to reduce your tax liability annually.
Here’s the answer …
Pass your loss details to your accountant – they should do the rest!!
Salon Tax Saving Step Number 4 … Make the most of your Personal Allowance.
If you’re a company director here’s a simple flowchart to help you make the most of it.
Salon Tax Saving Step Number 5 … Use your Annual investment Allowance (AIA).
Did you know that from the 1st of April 2014 until 1 January 2016 you have £500k per year available to write off against profits. AIA Qualifying expenditure covers most assets purchased for use by businesses. It includes:
- Office furniture and equipment
- Building fixtures e.g. shop fittings
- Business machines
- Computer hardware and qualifying software – e.g. Phorest
Salon Tax Saving Step Number 6 … Providing a Childcare Voucher Scheme.
Employers who provide support for their staff through childcare vouchers benefit in a number of ways including:
- National Insurance contributions of up to £300 per year.
- Tax Savings & National Insurance for Employees
- Demonstrates commitment to your staff and enhances company image
- Improve Staff motivation and morale, which will inevitably lead to increased motivation and productivity.
Salon Tax Saving Step Number 7 … Maximising your Tax FREE Isa and Pension allowances.
These are a great way to save tax so make sure you speak to your local Financial Advisor or if you haven’t got one you can trust get in touch and I will put you in touch with my recommended professional.
So that’s it! 7 ways you can legitimately pay less tax if you run a salon in the UK. I hope you’ve found it useful and if you have any questions leave a comment and I’ll do my best to answer it for you.
If you have any questions or queries regarding any of these points, please feel free to contact either Chris Cheeney (firstname.lastname@example.org) or your own Accountant for more details.
Thanks for reading!