Self employed hairdresser help

manthy18

Hello,

I am after some help to try and reduce my partners tax bill. She is a self employed hairdresser based in a salon and has a tax bill of 3400 and a NI bill of 1088. We have not put any expenses on the Self assessment and just wondered if anyone knew of anything that's claimable against it?
Also when it comes to January will the HMRC give us time to pay?

Thanks

John_Pierpoint

I am slightly confused.
Are you saying that your partner started work as a self employed hair dresser during tax year 2011/12, which ended on 05 April 2012?

You have rushed to fill in the self assessment tax form and the calculation is that you must pay 3,400 + 1088 in taxes due at the end of January ?

The bad news is that if I have understood correctly you will be owing those figures PLUS six months in advance for year 12/13 next January and a similar amount as a payment on account in July 2013. [The tax system is not daft you might "do a runner" to somewhere where the tax man cannot get at you].

You will have to explain how this "self employment" has been structured.
Does your partner "self invoice" against each customer, with the salon taking a rental cut for the hire of the chair and other facilities?

If so you have not really done your accounting to calculate your profit correctly.

What do the other hairdressers do ?

Pennywise

What expenses have they incurred due to their work, such as:-

Equipment (scissors, combs, shavers etc)
Materials (shampoo, solutions etc)
Chair rental
Power
Advertising
Stationery, postage, telephone for contacting customers etc
Magazines (for styles, customers to read etc)
Training (new techniques rather than basic initial training)
Professional body subscriptions
Business insurance
Travel to buy supplies
Travel to courses
Travel to customers' homes

You need to think about what expenses that they wouldn't have spent had they not been in business.

manthy18

Thanks,
it for tax year 2011/12 and the tax is for 2400 and 1088 in NI and then on top an additional !700 on account and then another 1700 due in July. The salon work out her cut and give her a written reciept each week of her taking and her net amount she is due which is 39% of the gross. Am I right in thinking because its the same place of work each day that she Cannot claim travel?

Thanks for your help

Lovelyjoolz

manthy18 wrote: »

The salon work out her cut and give her a written reciept each week of her taking and her net amount she is due which is 39% of the gross.

The ideal thing would be to obtain the calculations the salon does and apply the deductions they make as an expense, but without seeing what those deductions are, I can't tell you if they would be legitimate expenses. It sounds like they are deducting a proportion of their costs from your partner's earnings, which means that she is not self employed in the correct sense.

What equipment does she provide herself? Her own scissors? Combs etc? Does she have receipts she can apply?

It sounds to me like the salon is shafting her tbh! She is "self employed", but THEY decide what to pay her? Rubbish - they are just avoiding running a PAYE system, and HMRC would not be happy if they knew. If I were her, I would be telling the salon to get stuffed and going mobile, taking her regulars with her. They are taking the mickey something chronic here!

chrismac1

Ahem, with all respect to the last poster this sounds more like "rent a chair" to me. In my neck of the woods most "rent a chair" people are in my view genuinely self-employed, or at least if I were their accountant (I am for one of their employers) I would have a case to argue against any challenge.

You'll find many posts if you Google "rent a chair UK tax" or similar for more details, here is one:

http://www.hji.co.uk/community/forums/chair-rental-self-employment-and-the-law-11426.aspx

The employer should have considered this issue carefully in the way he or she is operating the salon. Unless you feel strongly your partner is an employee, you now need to claim every legitimate expense item that moves!

Pennywise

Have to agree with Chrismac. Hairdresser's rent-a-chair is very common. Most salon owners will follow their professional body's guidance and template contract and in which case, will usually comply with the requirements for self employment.

Very similar scenario with associate dentists - they likewise "rent a chair", but also the other surgery equipment, staffing, etc. They too, get a percentage of the actual "takings", i.e. patient and NHS charges, with usually around 50% deducted for the costs of materials used, equipment and surgery running costs.

It's the "risk versus reward" factors that point towards self employment - i.e. no pay if you don't work due to sickness or holiday, or don't have any clients, at least partial responsibility for paying for your equipment and materials, freedom to offer and negotiate whatever services you feel are appropriate directly with the customer, etc.

John_Pierpoint

Similar to arrangements for many taxi/hire car/courier drivers.

A lot of /people doing these jobs simply don't have access to the capital, and perhaps the organisational skills, to set up on their own account.

They find it easier just to get on with the job and have subcontracted all the services required to get the bums on the seats.