As a self-employed hairdresser, filing your tax return might seem overwhelming, but it’s an essential part of managing your business finances. In this post, we’ll break down the process to make it as simple as possible, helping you avoid common mistakes and stay on top of your tax obligations.

1. Know Your Tax Deadlines

   Before you dive into your tax return, it’s essential to know when it’s due. For most self-employed individuals in the UK, tax returns are filed annually by 31st January following the end of the tax year (which runs from 6th April to 5th April). If you miss this deadline, you may incur late filing penalties, so keep track of the dates!

2. Register for Self-Assessment

   If you haven’t already, you need to register with HM Revenue and Customs (HMRC) for Self-Assessment. This is the system used for reporting income and paying tax if you're self-employed. You can register online, and once you're registered, HMRC will send you a Unique Taxpayer Reference (UTR), which you’ll need to complete your tax return.

3. Gather Your Financial Documents

   To complete your tax return, you’ll need to gather a few essential documents. These include:

   • Income records: Total income from your hairdressing services, including cash and card payments. Keep track of all bookings, tips, and any extra services you offer.
   • Business expenses: Receipts for any tax-deductible expenses, such as product purchases, salon rent, tools, training, and insurance.
   • Bank statements: These help ensure your income and expenses are accurate and help you track your cash flow.

4. Record Your Income and Expenses

   As a self-employed hairdresser, it's crucial to keep accurate records of both your income and business expenses. Tools like accounting software or even spreadsheets can help you track these easily. By categorising your expenses, such as products, marketing, and transport, you'll have a clearer picture of your net income.

   Tip: Using FroHub’s reporting section can help you quickly track and visualise your income, expenses, and tax estimates, making your tax return process smoother.

5. Complete Your Tax Return

   When you're ready to file, you can complete your tax return online through the HMRC Self-Assessment portal. You’ll need to enter your income, business expenses, and any other relevant financial information. You’ll also be asked about any other income you might have, such as rental income or investments.

   Tip: Be sure to double-check everything before submitting to avoid mistakes. If you’re unsure, consider seeking advice from an accountant to ensure accuracy.

6. Pay Your Tax

   Once your tax return is submitted, HMRC will calculate how much tax you owe based on your earnings and allowable expenses. The tax due will include both income tax and National Insurance contributions. You’ll need to pay by the 31st January (following the end of the tax year), and you may also need to make advance payments for the following year (known as "Payments on Account").

   Tip: If you’re struggling to pay the amount owed in one go, HMRC offers payment plans to help spread the cost.

7. Keep Your Records Organised

   Even after you’ve filed your tax return, it’s important to keep all records and receipts for at least 5 years in case HMRC requests them for an audit. Proper record-keeping not only helps with your tax return but also helps you track the financial health of your business throughout the year.

Filing your tax return as a self-employed hairdresser doesn’t have to be stressful. With proper planning, organisation, and the right tools, you can stay on top of your finances and ensure you're paying the correct amount of tax. And remember, if you’re ever unsure, seeking help from a tax professional can make the process easier and prevent costly mistakes.