How to Start a Beauty or Hair Business in the UK

The Beauty and Hair Industry: A Brilliant Place to Be Self-Employed

The UK beauty and hair industry is worth over £30 billion, and a huge proportion of it is powered by self-employed professionals. Whether you're a mobile hairdresser, a nail technician working from home, a beauty therapist renting a room, or a barber renting a chair in a busy high-street shop — there's real money to be made doing work you love.

But the way you structure your business affects everything from how much tax you pay to what expenses you can claim. And in an industry where cash payments and tips are common, keeping proper records isn't optional — it's essential.

Here's your complete guide to getting set up properly.

Mobile vs Salon: Different Business, Different Expenses

The first big decision is where you'll work, and it fundamentally shapes your expense profile.

Mobile Beauty or Hair

Going mobile means travelling to clients' homes (or offices, or wedding venues). Your startup costs are lower — no rent, no utility bills — but you'll spend time and money on travel.

Typical expenses for mobile professionals:

• Mileage to clients — 45p per mile for the first 10,000 miles, 25p after that
• A portable kit — trolley, mirrors, portable hood dryer, fold-up chair
• Products carried with you
• Parking costs
• Phone and scheduling app costs

The mileage claim alone can be significant. If you visit 5-6 clients a day and drive an average of 40 miles, that's over £4,500 per year in mileage deductions at the 45p rate.

Salon-Based (Your Own Premises)

If you rent or own salon premises, your expenses look very different:

• Rent — fully deductible
• Business rates
• Utilities — electricity (you'll use a lot), gas, water
• Shop insurance — premises, contents, and public liability
• Fit-out and decoration — capital allowances apply to salon equipment (chairs, basins, mirrors, dryers)
• Cleaning and maintenance

Running a salon is a bigger financial commitment, but it also means a more professional setup and the potential to grow by renting chairs to other self-employed stylists.

Working From Home

If you've converted a room into a treatment room or salon, you can claim the home office proportion of your household costs. You'll likely also need to check your home insurance covers commercial use, and you may need planning permission or a change-of-use application from your local council depending on the scale.

Chair Rental: You're Self-Employed, Not an Employee

This is one of the most misunderstood arrangements in the industry. If you rent a chair (or a room) in someone else's salon, you are almost certainly self-employed — not an employee of the salon owner.

What this means in practice:

• You pay the salon a fixed weekly or monthly rent for your chair/room
• You set your own prices, choose your own products, and manage your own client list
• You keep all the money your clients pay you (minus the rent)
• You are responsible for your own tax, National Insurance, and record keeping
• You need to register as a sole trader with HMRC

The chair rental is a deductible business expense. If you pay £150 per week for your chair, that's £7,800 per year you can claim against your income.

Watch out for disguised employment. If the salon owner tells you what hours to work, sets your prices, provides all your products, and controls how you do your job, HMRC might consider you an employee regardless of what your contract says. This matters because it affects both your tax position and the salon owner's obligations. If you're unsure, the HMRC employment status tool (CEST) can help clarify.

Products and Stock Management

Whether you're a hairdresser buying colour, a nail tech buying gel polish, or a beauty therapist buying waxing supplies, your product costs are a significant business expense.

All products used on clients are fully deductible — they fall under "stock and materials" for HMRC purposes.

A few tips for managing product expenses:

• Buy in bulk where possible to save per-unit costs, but only if you'll use the products before they expire
• Keep receipts for everything. Salon supply purchases from Sally Beauty, Capital Hair and Beauty, or online suppliers — snap a photo and keep a digital record
• Track product costs by month so you can see if your spending is proportionate to your income. If you're spending 30% of your revenue on products, that might indicate room for pricing adjustments or supplier changes

Products you buy for personal use (your own hair colour, your own skincare) are not deductible, even if you buy them from the same supplier at trade prices. Only items used in client services count.

Insurance: Protecting Yourself and Your Clients

Beauty and hair treatments carry inherent risks — allergic reactions to colour, burns from hot tools, skin reactions to products. Proper insurance isn't just sensible, it's essential.

You'll need:

• Professional indemnity / treatment risk insurance — covers claims arising from treatments you perform (allergic reactions, adverse results, burns)
• Public liability insurance — covers injuries or property damage in your workspace (a client slipping on a wet floor, for example)
• Product liability — if you sell retail products, this covers claims related to products you've recommended or sold
• Employer's liability — only if you employ anyone (not needed for chair renters)

Specialist providers like Salon Gold, ABT Insurance, and Professional Beauty Direct offer combined policies from around £80-£200 per year depending on the treatments you offer.

These premiums are fully deductible as business expenses.

The Full List of Allowable Expenses

Here's a comprehensive overview of what you can claim:

• Products and materials — colour, peroxide, nail polish, wax, skincare, foils, gloves, towels
• Equipment — hairdryers, straighteners, clippers, UV lamps, beauty beds, salon chairs (capital allowances for bigger items)
• Chair or room rental
• Training and CPD — new technique courses, brand-specific colour training, qualification upgrades
• Insurance premiums
• Marketing — Instagram ads, salon website, business cards, loyalty cards, printed menus
• Software — booking systems (Fresha, Treatwell, Booksy), payment processing
• Phone — business proportion of your mobile contract
• Travel — mileage for mobile work, travel to training courses, supplier visits
• Laundry — towels, capes, uniforms. If you use a laundry service, the full cost. If you wash at home, a reasonable estimate of the cost
• Professional memberships — NHF (National Hair & Beauty Federation), BABTAC, or guild memberships
• Uniforms — branded or specialist clothing worn exclusively for work

For the complete breakdown, see our sole trader expenses guide.

Managing Tips and Cash Payments

Let's address the elephant in the salon. Tips and cash payments are common in the beauty and hair industry, and they create a record-keeping challenge.

Tips are taxable income. Whether a client adds £5 to a card payment or leaves a £10 note on your station, HMRC considers it part of your earnings. You need to record it and include it in your Self Assessment return.

Cash payments for services are also taxable. If a client pays £45 in cash for a cut and colour, that's £45 of income, whether or not it passes through your bank account.

The simplest approach is to record everything as it happens. With Accounted, you can message Penny on WhatsApp — "Mrs Davies paid £65 cash plus £5 tip" — and it's recorded instantly. No writing it on a scrap of paper that gets lost. No trying to remember at the end of the week. WhatsApp bookkeeping fits naturally into the rhythm of a busy salon day.

If you can, encourage card payments. They create an automatic paper trail and make your record keeping dramatically easier. Tap-to-pay devices from SumUp or Zettle cost very little and most clients prefer the convenience.

VAT Threshold: Know Your Numbers

The beauty and hair industry is one of those sectors where successful sole traders can approach the VAT registration threshold faster than they expect. At £90,000 of turnover in a rolling 12-month period, you must register for VAT.

A busy stylist charging £60-£80 per client and seeing 6-8 clients per day, five days a week, could turn over £90,000-£160,000 per year. If that's you, VAT registration is something you need to plan for — it affects your pricing, your margins, and your paperwork.

Our VAT MTD registration guide walks you through the process.

Simple Record Keeping Between Appointments

You didn't train as a stylist or therapist to spend your evenings doing admin. The good news is that modern bookkeeping doesn't require it.

Connect your bank account to Accounted, and Penny categorises your income and expenses automatically. Snap receipts from Sally Beauty, Costco, or Amazon between clients and send them via WhatsApp. Log cash payments as they happen. When your quarterly MTD submission comes around, you review and submit — no HMRC penalties, no stress, no lost weekends.

Your hands should be creating beautiful work, not wrestling with spreadsheets.

Ready to simplify your bookkeeping? Try Accounted free for 14 days →

Related Reading

• How to Start a Tutoring Business in the UK
• Tax Guide for Locum Vets and Veterinary Consultants

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