Making Tax Digital for Income Tax and beauty industry professionals
If you're a self-employed beautician, hairdresser, barber, nail technician, makeup artist or other personal care professional, Making Tax Digital for Income Tax (MTD IT) may already apply to you, or it could be coming your way from April 2027.
Whether you work from your own premises, rent a chair or space in a salon, visit clients at home or combine several different types of beauty work, it is important to understand when the rules apply and what you need to do.
Does Making Tax Digital for Income Tax apply to me?
MTD IT is being introduced based on your qualifying income, which is your total gross income from self-employment and/or any property you rent out.
You need to comply with MTD IT at these times depending on your income threshold:
- From April 2026 – for income over £50,000.
- From April 2027 – for income over £30,000.
- From April 2028 – for income over £20,000.
This means some beauty and personal care professionals are already using MTD IT, while many more will join from April 2027.
Remember that HMRC looks at your combined qualifying income. For example, if you're a self-employed hairdresser earning £38,000 and also receive £13,000 of property rental income, the two are added together to determine whether you meet the threshold.
Self-employed or employed by a salon?
How you work matters.
If you're employed by a salon and paid through PAYE, that employment income is outside Making Tax Digital. However, if you run your own business as a sole trader, MTD IT may apply once your qualifying income exceeds the relevant threshold.
The beauty and personal care sector includes many different working arrangements. You might rent a chair in a hair salon, hire a treatment room, work on a commission basis or provide mobile services. These arrangements do not automatically determine whether you are employed or self-employed, so it's important to make sure your employment status is correct.
What does MTD IT mean day-to-day?
MTD IT doesn't change how much tax you pay, but it does change the way you keep records and report information to HMRC. If you're within MTD IT, you'll need to:
- Keep digital records of your business income and expenses.
- Send quarterly updates to HMRC using compatible software.
- Submit your tax return through compatible software after the end of the tax year.
Quarterly updates are summaries of your year-to-date income and expenses totals, not additional tax returns, and you don't pay tax every quarter.
For a busy beauty or hairdressing professional, your digital records might include client payments, cash takings, chair or room rental, product sales and business expenses. Keeping these records up to date as you go can make quarterly reporting much easier than trying to piece everything together later.
At the end of the tax year you’ll need to complete an annual declaration. This is where you finalise your income and expenses for the tax year, make any necessary adjustments, add other relevant income and information, and confirm your final tax position with HMRC. This replaces the need to submit a separate Self Assessment tax return.
What is HMRC-recognised Making Tax Digital software?
HMRC doesn't provide free software for Making Tax Digital for Income Tax. To meet your MTD IT requirements, you'll need software that is recognised by HMRC as compatible with its MTD IT systems. This means it is able to interact with HMRC’s portal and make the required submissions. In your preparations, you'll need to choose a suitable software provider to send your quarterly updates and complete your final annual declaration.
Can I continue using a spreadsheet for MTD IT?
Yes. If Excel or another spreadsheet is already part of the way you manage your business, you don't necessarily need to abandon it.
Your spreadsheet can't submit MTD IT information to HMRC by itself, so you'll need compatible software that can digitally connect your records and make the required submissions.
TaxNav's HMRC-recognised bridging technology lets you continue keeping your records in a spreadsheet and use TaxNav to make your MTD IT submissions. Alternatively, you can enter your income and expenses directly into TaxNav through your web browser.
This gives you the flexibility to choose an approach that fits around your working day rather than adopting a complicated accounting system you don't need.
What expenses can beauty professionals claim?
Allowable expenses depend on your circumstances, but common business costs for self-employed beauty, hairdressers and personal care professionals can include things such as:
- products, consumables and stock used or sold in your business,
- salon, chair, room or other business premises costs,
- insurance, marketing and eligible training costs,
- allowable business travel and uniforms or protective clothing.
There are important limits and it’s important to check HMRC’s website regarding permitted expenses. Most importantly for MTD IT eligibility, claiming expenses reduces your taxable profit but doesn't reduce the gross qualifying income HMRC uses to determine whether you need to join MTD IT.
Keep Making Tax Digital simple with TaxNav
If Making Tax Digital already applies to you, or you expect to come within the rules from April 2027, getting comfortable with digital record-keeping can make the transition much easier.
TaxNav is HMRC-recognised software designed to keep Making Tax Digital simple and affordable for self-employed people. You can enter your income and expenses directly or keep your existing spreadsheet and connect it using our HMRC-recognised bridging technology.
TaxNav also helps you submit your quarterly updates and final tax return to HMRC, with deadline reminders to help you stay on track.
With a 30-day free trial and subscriptions from £6 + VAT per month or £60 + VAT per year, you can try TaxNav before deciding whether it's right for your business.