Important News for Hairdressers, Barbers & Beauty Folks! 📣

Some important new info from HMRC could affect how you work. This applies if you own a salon, travel to clients, work from home, or rent a chair in a salon.

Basically, HMRC has new rules to help us all understand if you're classed as employed or self-employed.

For a while now, there's been a bit of confusion about how different ways of working fit into the employment rules. These new rules are here to make it clearer for everyone, from salon owners to individual stylists, so we all know we're paying the right tax.

This is important because HMRC is paying closer attention to make sure everyone is following the tax rules.

Understanding If You're Employed or Self-Employed: Why It Matters

Lots of people in the industry are self-employed because it gives them freedom. But sometimes, the way a self-employed person works can look a lot like someone who's employed. These new rules help us figure out the difference.

Here are the main things HMRC will look at to decide if you're likely employed or self-employed:

• Your Work Hours:

  • Employed: If the salon owner tells you exactly when you need to be there and how many hours to work, you're more likely to be seen as employed.

  • Self-Employed: If you mostly decide your own hours and can choose when you work, you're more likely to be self-employed.

• What You Do Each Day:

  • Employed: If the salon owner gives you a specific list of tasks and tells you exactly what to do, you're more likely to be employed.

  • Self-Employed: If you have more control over the services you offer and how you do them, you're more likely to be self-employed.

• How You Get Paid:

  • Employed: If clients pay the salon, and then the salon pays you a wage, you're more likely to be employed. Tax and National Insurance are usually taken out of your pay before you get it.

  • Self-Employed: If you take payments directly from your clients and are responsible for managing your own money, you're more likely to be self-employed.

What You Need to Do About Tax:

• If You're Self-Employed: If you work for yourself, you MUST register for Self Assessment. This means telling HMRC how much money you earn and paying your income tax and National Insurance. If you earn enough, you'll also need to pay VAT.

• If You Own a Salon: If you own a salon, you need to do VAT returns on top of any other taxes you pay.

• If You're Employed: If you work for someone who tells you what to do, when to work, and pays you a wage, then THEY are responsible for taking the right amount of tax out of your pay before you get it.