Check employment status if you work in hair and beauty
Find out if you or the people who work for you should be employed or self-employed for tax purposes while working in the hair and beauty industry.
There are different ways of working in the hair and beauty industry. For example, being employed by a salon, barbershop or working freelance as self-employed.
Working freelance could mean you’re:
- offering services from your own salon
- working as a mobile hair stylist or beauty therapist either at your own home or a client’s home
- renting a chair or room in a salon
For tax purposes you’re either employed or self-employed. To work out your employment status, you’ll need to consider the terms and conditions in your contract. You’ll also need to consider your actual day to day working practices. These will determine who must pay:
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Income Tax
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National Insurance contributions
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VAT
Do I need to report my income from hair and beauty?
How to work out your employment status
The check employment status for tax tool can help you determine your employment status. If you’re a salon owner, it can also help you determine the status of people who work within the salon.
These are some common signs that may indicate if the work you do in a salon means you might be employed or self-employed. Using this list alone will not confirm your employment status.
| Working practice | Employed | Self-employed |
|---|---|---|
| Start and finish times | Set by the salon | You decide your hours of work |
| Days of work | Set by the salon | You decide which days to work |
| Taking time off | Salon decides this with you | You decide when to take time off |
| Where you work | Salon decides this | You decide where you work |
| Clients | Salon provides these | You provide your own |
| Products | Salon provides what to use | You may provide these and choose what to use |
| Daily tasks or duties | Salon sets these | No set tasks, you decide the structure of your working day |
| Follow instructions on how to do work | As advised by the salon manager or supervisor | Not directly answerable to anyone else |
| Payment | You are paid a set rate by the salon | You decide how much you charge for your work |
If you find you have a mixture of both employed and self-employed working practices, use the check employment status for tax tool to determine your employment status.
If you’re employed
Your employer will deduct Income Tax and National Insurance contributions from your pay. You’ll be entitled to a range of employment rights that self-employed people do not get.
Example
You work in a salon while studying at college as an apprentice hair stylist. You qualify and the salon offers you a full-time position.
The salon will:
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decide your regular shift pattern
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pay you a fixed hourly rate of pay
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assign you clients from their daily bookings
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set the time allocated for each booking
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monitor your performance
Find out more about your employment status as an employee.
If you’re self-employed
You must:
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report your income to HMRC through Self Assessment tax returns
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pay tax and National Insurance contributions on your income
If you’re working through a limited company, you need to report your company income on a corporation tax return.
If your trading turnover is over the VAT threshold, you must also register for and pay any VAT due.
Self-employed workers do not have employment rights but are entitled to protection from health and safety risks and from discrimination. Even if you’re self-employed for tax purposes, you may have worker status for employment law purposes.
Example
You’re a stylist renting a chair in a salon providing specialist advice and services to your own clients.
You:
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pay rent to the salon owner for the use of a chair to provide services to your own clients
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may buy your own haircare products and equipment
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set your own work schedule
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keep records of your clients
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choose how much you charge for your work — the client pays you
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do not earn money if you do not have appointments
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may have similar working arrangements at other salons
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may have appointments with your clients in your own home
Find out more about your employment status when you’re self-employed.
If you’re a salon or barbershop owner
If you’re VAT registered and rent out space in your salon or shop, you need to report this income on a VAT return.
If you’re not VAT registered find out how to register for VAT. Before you register, you can check what registering for VAT may mean for your business.
Example
You own a barbershop and rent out chairs to self-employed barbers. You:
- are registered for VAT as your total taxable turnover for the last 12 months from the barbershop is over the threshold
- have a written contract with each barber
- agree a commission percentage with each barber and take that commission on every appointment as rent for the space
- add on VAT for renting the chair
- provide the barbers with an invoice setting out how much commission you’ve taken and the VAT you’ve charged for renting the chair
- declare your income from the barbershop on a VAT return and pay any VAT due
Advice on employment rights and responsibilities
Acas provides free, impartial and confidential advice on employment rights and resolving workplace conflict.
Acas helpline
Telephone: 0300 123 1100
Monday to Friday, 8am to 6pm
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