Quick answer
If you rent a chair or run your own salon, you’re usually self-employed, and your total takings, including tips paid directly by customers, count towards the MTD threshold. Chair rent is an expense. If you’re employed by a salon, your wages and tips paid through payroll don’t count.
Key facts
Chair renters are usually self-employed
Tips paid directly by customers are taxable income
Chair rent is an allowable expense
Employed stylists are outside MTD for that income
Employed or self-employed?
HMRC says you’re probably employed if the salon sets your hours, books your clients, provides products and pays you a set wage. You’re probably self-employed if you choose when you work, find your own clients, set your own prices and buy your own products. Chair renters usually fall into the self-employed group.
Tips
Tips paid through an employer’s payroll are employment income and you don’t need to do anything. Tips customers pay directly to a self-employed stylist, in cash or by card, are part of your income and must be recorded.
When MTD applies
Start date | Qualifying income over | Based on your tax return for |
|---|---|---|
6 April 2026 | £50,000 | 2024/25 |
6 April 2027 | £30,000 | 2025/26 |
6 April 2028 | £20,000 | 2026/27 |
A barber renting a chair and taking £650 a week over 48 weeks turns over £31,200. That’s over £30,000, even though chair rent and products reduce the profit.
Expenses
Chair or room rent
Products, scissors, clippers and tools
Booking app fees and card reader charges
Training that keeps your current skills up to date
Tunics or aprons used only for work
VAT
Being in MTD for Income Tax doesn’t make you register for VAT. That only applies if your turnover goes over £90,000 in a rolling 12 months.
Use the MTD checker to see your own start date.