HMRC is urging hair and beauty professionals to check their employment status to make sure they’re paying income tax correctly and following the latest guidelines.
The new guidelines clarify income reporting rules and working setups for salon owners, self-employed hairdressers, and mobile beauty therapists.
Changes: at a glance
- HMRC released new guidance for hair and beauty professionals in May 2025
- beauticians, mobile hairdressers, and beauty therapists need to check their employment status to make sure they’re paying income tax correctly
- salon owners hiring staff or renting a chair to self-employed professionals need to check they’re following the rules on employment status for tax purposes
- it’s important to distinguish between self-employed and employed when working in a hair and beauty salon
The different ways of working in the hair and beauty industry mean that it can be confusing if someone’s employed or self-employed for tax purposes.
The ‘rent a chair’ model makes tax reporting particularly complex as professionals rent a space as a self-employed person but can be treated more like an employee.
Who is this tax guidance for?
HMRC’s latest hair and beauty tax guidance explains how to work out employment status for:
- run a salon
- rent a space in a salon as a hairdresser, barber, or beauty therapist
- work as a mobile hairdresser, barber, or beautician
What do you need to do now?
Hair and beauty professionals need to work out if they’re either self-employed or employed to determine how to pay tax to HMRC.
HMRC’s check employment status for tax tool helps salon owners and self-employed professionals determine their tax responsibilities. It outlines different working practices and how this can indicate whether someone’s employed or self-employed.
Salon owners should provide a written agreement about which services they provide and which services are provided by the stylist.
It can also be a good idea to:
- make sure you’re claiming all the allowable expenses you can
- hire an accountant
- update your bookkeeping practices
Why renting a chair can cause tax confusion
When salons rent a space or chair and set certain working practices (for example, business hours and clients), this can result in a self-employed stylist or therapist being in ‘disguised employment’.
Disguised employment means freelancers are treated like employees but are losing out on rights like holiday pay and sick leave. Plus, the salon isn’t paying the right National Insurance contributions from employee salaries.
If a salon owner (rather than the stylist) is setting the working hours, daily tasks, and payment then that suggests they’re an employee.
Tax rules for employed and self-employed workers
| Employment status | Tax responsibilities | What do you need to do? |
| Employed | The business / salon owner pays tax to HMRC on behalf of the employee | Check employment rights and contract |
| Self-employed | Freelancers report and pay tax to HMRC | Register for Self Assessment and pay income tax and National Insurance to HMRC |
Example – working out employment status
The HMRC guidance includes example scenarios to help clarify what constitutes an employed position and when someone’s self-employed.
For example, a stylist rents a chair in a salon and pays rent to the owner of the salon. They’re self-employed as they set their own work schedule, prices, and appointments. They don’t get paid if they don’t have any appointments.
Reporting income as a limited company
Self-employed people working through a limited company need to report income on a quarterly corporation tax return. And it’s a legal requirement to register for VAT once taxable turnover goes over £90,000.
Paying tax when renting a chair
As a salon owner…
Salon owners earning rentable income from hiring out a space or chair need to register for VAT and pay tax on these earnings.
As a self-employed stylist…
If you rent a chair as a self-employed stylist or beautician then you’ll pay tax through Self Assessment.
Where to get help
If you’re unsure what you need to do, it’s always best to speak to an accountant or call HMRC. There’s also a range of resources available for people working in the hair and beauty industry:
- HMRC helpline: 0300 200 3300
- National Hair & Beauty Federation (NHBF)
- British Association of Beauty Therapy & Cosmetology (BABTAC)
Simply Business Knowledge centre:
Key takeaways
- hair and beauty professionals need to check their employment status for tax is correct
- HMRC issued updated tax guidance in May 2025
- guidance applies to all hair and beauty professionals – salon-based, mobile, and home-based
FAQs – hair and beauty tax
What are allowable expenses for hairdressers?
Hairdressers can claim certain items as business expenses to reduce their tax bill. Allowable expenses for hairdressers include equipment and tools – from foils and colours to scissors and hairdryers.
You can also claim things like business insurance, marketing costs, rent a chair fees, clothing, and certain memberships to professional bodies.
How can I tell if I’m self-employed or employed
The government has a tool where you can check employment status for tax to help you find out whether you’re employed or self-employed. You’ll need to look at the different working practices and activities to determine what this means for your tax responsibilities.