Are you missing out on claiming business expenses, and paying too much tax?

According to the Office of National Statistics 15% of the UK’s workforce is self-employed, yet many are unaware of the business expense benefits that are available to set against tax.

You can deduct allowable business expenses from your business’s annual turnover when calculating your profits, so the larger your expenses bill the lower your tax bill will be.

If you’re self-employed and work in the hair, beauty or barber industry take a look at these FAQs complied by Easy Accountancy on what you can and can’t claim as a business expense:

Are professional fees eligible as a business expense?

The cost of most professional fees such as insurance, lawyers’ costs or accountancy services relating solely to your business can be claimed as an expense. As can your NHF subscription.

Can my branded salon uniform be classed as an expense?

If your work requires protective clothing or a branded uniform, such as a beautician’s tunic, this cost could be classed as an expense. However, clothing that can be used as part of your everyday wardrobe, even if it is a more formal suit or business dress, is not allowable as an expense.

I have to stay overnight on salon business is this an expense?

If your hair, beauty or barber business requires you to stay away from your permanent address you can claim reasonable hotel costs; for example, if you were attending a course, training or a business event. Remember to keep your receipt.

If I use my personal mobile phone for business, what am I entitled to claim?

You can only claim the percentage of minutes and texts that are used for business purposes as an expense. Personal use cannot be claimed even if you are on a business trip.

Can speeding or parking fines be paid through my hair & beauty business?

Parking fines or speeding tickets cannot be claimed as an expense, even if the fine is incurred on a salon business trip.

Business mileage for my hair & beauty business

If you use your car for business purposes you can claim 45p per mile for the first 10,000 miles travelled, and then 25p per mile thereafter.

NOTE: To claim mileage if you are self-employed (and do not operate through a limited company) you can claim per mile OR for a proportion of usage, but not both.

Is the cost of an eye test classed as an expense?

Yes, if your work requires you to use a computer you can claim the cost of an eye test as a business expense.

Not sure whether you have an allowable claim? If you’re an NHF Member get a quick answer to your expenses’ questions, and save running up accountancy fees, by calling our Commercial Lifeline. This service is free to Members and offers confidential advice on tax and VAT matters, from Monday to Friday 9.00am - 5.00pm. Learn more here.

Keep business expense receipts

Finally, a quick reminder: to qualify all expenses must be solely for your hair & beauty business use. Moreover, HMRC can ask you to provide evidence that you have actually incurred the expense, so always keep your receipts.