Hair Salon Beginner Vat Advice

What exactly is VAT?

What exactly is VAT?

VAT stands for value added tax its latest rate is 20% which means that all services that your hair salon delivers should add 20% on in tax. This tax is calculated then paid back to the tax man every three months or financial quarter. This applies tosalon hair straightenersall services and product income.

Who Pays It

Any business enterprise, individual (sole trader) who earns in excess of 77,000 in 12 months you then need to register for Vat inside of 30 days. This is the current rate you ought to keep an eye on the rate this may possibly change at any given budget so you will need often to verify the budget which is boring I know but could save you a great deal of hassle in the foreseeable future.

If you bring in under this threshold and trade in the United kingdom you'd not need to register for VAT but I recommend you verify at theHMRCweb page and also verify together with your accountant who ought to keep you up to date of any budget changes.

Documenting Salon Income Maintaining Records

The key to not being mixed up with vat and maintaining on top of things for your salon is record holding which for imaginative types like ourselves isn't our strongest thing. Plus every person hates maintaining track of sales receipts you just wish to get on with what you love that's hairdressing. But as you can read from above should you be close to the limit it pays to prepare first and get techniques in place prior to the date. As a hair salon there are highly busy occasions where the whole salon will just be focused on clients that is a good thing but ensure you set aside some time for you to organise this along with your tax advisor to get off to the correct record maintaining start.

Some basic options

Some say the simplest ideas are the most effective but you could just keep it all paper receipt based so essentially you have what is known as a part book and every sale made you make you write down the service amount and amount of tax the customer gets a copy along with your salon keeps a copy legally the receipt needs to state your company name and address plus vat number along with a date.

A different solution is some tills can be setup so they look after vat so once you make your end of day till cash up you hit a button and it shows a breakdown with the days takings and the VAT element. You would have already have given receipts to clientele the till receipt programmed has all of the legal information on it.

Other solutions

Another solutions include far more advanced salon systems that are good for recording sales managing books and stock these are brilliant for on the spot information of vat and sales they can also be somewhat pricey although they are packages available in the market that are what's referred to as open source for taking and managing bookings a short search for salon booking application open source will bring them up. If you don't want all the hassle you'll find suppliers who have Web software programs along as your salon has a connection you can access there application usually these are at a month to month fee.

Summary

If you aren't vat registered keep a close eye on your takings before you hit the threshold

Prepare in case you get near think about record saving chat to your tax advisor

For those who have not got an tax advisor and are trying to choose one for your salon watch out for my next article.

by: Keven Farnumby

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