As a self-employed hairdresser, one of the most effective ways to reduce your tax burden is by maximising your tax deductions. Understanding which expenses are allowable for tax purposes can save you a significant amount of money, and help ensure your hairdressing business stays financially healthy. In this post, we’ll guide you through common deductions you can claim and how to keep track of them to make tax season easier.

1. 1. Understand What Tax Deductions You Can Claim

      The first step in maximising your deductions is knowing what qualifies as a deductible expense. As a self-employed hairdresser, you can deduct a wide range of costs associated with running your business, including:

      • Hairdressing Equipment & Products: Scissors, clippers, combs, hair dye, and other supplies used for client services.
      • Salon Rent and Utilities: If you rent space in a salon, the rent you pay is deductible, along with utilities like electricity, water, and heating.
      • Home Office or Workspace: If you run your hairdressing business from home, you may be able to claim a portion of your home expenses, such as rent or mortgage interest, broadband, and electricity.
      • Training and Education: Any courses or workshops you attend to improve your skills or knowledge are tax-deductible.
      • Marketing & Advertising Costs: Whether it’s paying for online ads, flyers, or a professional website, marketing expenses are often fully deductible.
      • Insurance Premiums: Costs for insurance policies, such as public liability insurance, are also deductible.

   2. Track Your Expenses Throughout the Year

      One of the best ways to maximise your deductions is by keeping detailed records of your business expenses throughout the year. This will help ensure that no deductible expense is missed when it's time to file your taxes. Here’s how to stay organised:

      • Keep Receipts: Always keep receipts or invoices for any purchases related to your hairdressing business. This includes tools, supplies, or even your business-related travel.
      • Use Accounting Software: Connect your accounting software with FroHub to easily track your income, manage your expenses, and ensure your financial records are ready for tax season. You can also set goals for your expenses to stay on track and optimise your finances throughout the year.
      • Separate Personal and Business Expenses: It’s important to have separate accounts for your personal and business expenses to avoid confusion. This will ensure you're only claiming business-related costs.

   3. Don’t Forget About VAT and Sales Tax

      If you’re registered for VAT (Value Added Tax) in the UK, remember that VAT on business-related purchases can be reclaimed. This includes VAT on equipment, hair products, and even the VAT on your salon rent. However, make sure you're correctly documenting and reporting all VAT-eligible transactions to ensure you're not missing out on reclaiming any VAT.

   4. Maximise Allowable Mileage Claims

      If you travel for work - whether it’s to clients' homes or to buy supplies - don’t forget to claim mileage deductions. For business-related travel, you can claim a portion of the cost for your car expenses, including petrol, insurance, and repairs. The UK tax authority, HMRC, allows you to claim a flat rate per mile for business use, which simplifies the process.

   5. Claim for Business-Specific Clothing and Uniforms

      If you wear a uniform or specific clothing for your work as a hairdresser (such as branded T-shirts or aprons), you may be able to claim these as business expenses. However, clothing you wear outside of work is not deductible, so only clothing that is clearly linked to your business qualifies.

   6. Consider the Use of a Pension Plan

      As a self-employed hairdresser, you don’t have an employer contributing to your pension, but you can still set up and contribute to a private pension plan. Contributions to a pension plan are tax-deductible, so setting one up can help reduce your taxable income.

   7. Get Help From an Accountant or Tax Professional

      Navigating tax deductions can be complicated, especially when you’re self-employed. While tracking expenses and claiming deductions is something you can do yourself, it’s always a good idea to seek professional advice from an accountant. A tax expert can help you make sure you’re claiming everything you're entitled to and avoid mistakes that could lead to penalties.

   Maximising your deductions is one of the most effective ways to reduce your tax burden and keep more of your hard-earned money. By tracking your expenses, understanding which costs are deductible, and using tools like FroHub to manage both your bookings and finances, you'll be in a great position to reduce your taxes and grow your self-employed hairdressing business. Always remember to stay organised and, if needed, consult a professional to ensure you're optimising your tax situation.