SimpleReturns

Company tax returns for hairdressers and beauty businesses

Reviewed by Lee Jones, Founder · Updated 16 July 2026
The short answer

The filing job is the same for every limited company: once a year you send HMRC a Company Tax Return showing what your company earned and spent, even in a year you made a loss. The return is due 12 months after your accounting year ends, and any Corporation Tax is due sooner, 9 months and 1 day after the year ends. The hair and beauty version of it turns on card and cash takings, product costs, kit, and above all chair rental, the one arrangement in this trade that muddles whose money is whose.

Official source. This guide is a plain-English summary of official GOV.UK guidance, not advice. The authoritative source is Company Tax Returns on gov.uk. Always rely on that over our summary.

What counts as your company's income?

Corporation Tax is paid on your company's profit from doing business, which means every pound the company earns from customers has to be in the return, whatever route it arrived by. (Money that is not earnings, like a loan or your own cash you put into the company, is not income.)

  • Service takings, card and cash. Cuts, colour, blow dries, barbering, nails, lashes, brows, waxing, tanning, massage. Watch one thing with card: a card machine or app (Square, Zettle, SumUp) usually pays out after taking its fee, so the amount reaching the bank is already net. Report the full amount the customer paid as income and claim the fee as a separate cost; do not treat the smaller payout as your takings. Cash is just as much income, so keep a simple cash log that squares with what you bank.
  • Retail sales. Shampoo, oils, aftercare kits and anything else sold over the counter is company income too, separate from what the products cost you to buy.
  • Chair or booth rent you charge. If self-employed stylists or beauticians rent a chair, booth or room in your salon, the rent they pay you is your company's income. In a genuine chair rental setup, their client money is theirs, not yours; only the rent is yours. More on getting that line right below.
  • Tips. By law, tips must be given to the people who did the work, without deductions, so tips are not profit for the company to keep. If card tips land in the company account, they still need recording and passing on properly. If your staff pool or share tips, that is a payroll arrangement with its own rules, worth one conversation with an accountant or payroll provider to set up correctly.

What can your company claim?

The test for every cost is the same and it is short: the cost must be wholly and exclusively for the business. A cost that is partly personal only counts to the extent a business share can be clearly separated. In this trade, the usual claims are:

  • Chair, booth or room rent you pay. If your company is the renter, paying a salon for the right to work from a chair or a room, that rent is a normal business cost.
  • Products and consumables. Colour, developer, foils, shampoo, wax, nail products, lash supplies, gloves, couch roll, towels. Bought for clients, these are everyday costs of the trade.
  • Kit. Clippers, scissors, dryers, straighteners, styling chairs, backwash units, treatment beds, nail lamps, sterilisers. Bigger items you buy and keep can usually be claimed in full in the year you buy them, under what HMRC calls the annual investment allowance. Cars are the exception, with different rules.
  • Insurance. Public liability and treatment insurance bought for the business.
  • Booking and payment costs. Booking systems, salon software, website costs and the fees the card machine takes off each payment.
  • Laundry and cleaning. Washing towels and gowns and keeping the salon clean. One caveat: buying or washing your own everyday clothes is not claimable, even if the salon has a "black clothes only" dress code. Only protective wear like gowns and aprons counts.
  • Training and courses. Courses that keep your skills fresh or teach you something new in the work your business already does, say a colour correction course for a hairdresser or a new lash technique for a lash tech, are normally allowable. Training to move into a completely different line of work is the exception, and worth checking before you claim it.

The trap in this trade: chair rental muddles whose income is whose

HMRC's own guidance says salons come in three shapes. The staff are employed and every pound of takings belongs to the salon. Or self-employed stylists work for the salon, which still takes the customer's money. Or self-employed stylists rent a chair, take their own client money, and pay the salon rent. HMRC calls this an area where problems often arise, and it is the most common muddle we see in hair and beauty books.

Here is the honest version. A chair rental only keeps the money separate if it is genuine: the renter's client money belongs to the renter, the clients know they are the renter's clients, and the renter runs their own show, with their own prices, hours, insurance and tax. If the reality is blurrier, for example everything goes through one till and someone is paid a split at the end of the week, the takings can turn out to belong to the salon, which changes the salon's income, its profit, and how close it is to the £90,000 turnover line where VAT registration becomes compulsory. If your arrangement is a mix, has changed over time, or was never written down, have an accountant look at it once and put it straight. That is a structure question, not a form-filling one, and getting it wrong is expensive both ways.

What does filing look like with SimpleReturns?

Once you know whose money is whose, the filing itself is the simple part. You upload your company bank statement and answer a few plain-English questions, and your answers sort the takings, product costs, rent and kit into the right boxes on the return. You review every figure before anything is sent. It is free to start, no card needed, and filing costs £99 flat, covering both jobs: the tax return to HMRC and the accounts to Companies House.

One deadline nudge before you go: a late Company Tax Return costs £200 from the very first day, so if your year end was a while ago, today is a good day to start.

Common questions

Do I still file a Company Tax Return if my salon made a loss?

Yes. Once HMRC asks your company for a return, you must send one every year, even in a year you made a loss or barely broke even. The hair or beauty trade does not change that.

My card machine pays out after taking a fee. What do I report as income?

Report the full amount the customer paid, not the smaller amount that reaches your bank. The card fee (from Square, Zettle, SumUp and the like) is a separate business cost you claim back, so the fee is not lost, it just goes in a different place.

If someone rents a chair in my salon, whose income is their client money?

In a genuine chair rental, the client money belongs to the renter, not to you, and only the rent they pay you is your income. That only holds if the arrangement is really independent, with the renter setting their own prices, hours, insurance and tax, and the clients knowing they are the renter's clients.

Can my company claim my work clothes?

Not everyday clothes, even under a "black clothes only" dress code, and even if you only wear them for work. Protective wear like gowns and aprons does count, as does washing towels, gowns and keeping the salon clean.

When do I have to register for VAT?

VAT registration becomes compulsory once your taxable turnover passes £90,000. Chair rental can push a salon closer to that line than the owner expects if the takings turn out to belong to the salon rather than the renter, which is one reason to get the arrangement straight.

Ready to file your salon's return the simple way?

You upload your company bank statement and answer a few plain-English questions, and your answers sort the takings, product costs, rent and kit into the right boxes on the return. You review every figure before anything is sent. Free to start, no card needed, and £99 flat covers both filings: the tax return to HMRC and the accounts to Companies House.

Start your return

And if your chair rental setup is genuinely tangled, untangle whose money is whose with an accountant first; no software can decide that, and we would rather say so plainly.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.