Self-employment help for nail techs: registration & tax essentials

Are you keen to take the leap into self-employment? Here’s a guide to the registration and tax essentials you need to know…

For nail technicians working in salons who seek greater control over their careers, self-employment often feels like a natural next step. It offers professional and creative freedom, aiding in the pursuit of personal and financial growth. However, removing the comfort blanket of working as someone’s employee can feel like a big leap into the unknown. So here’s where to start!

Visualising your ideal client

Joanna Tompkins is the founder of business growth support communities, the Nail Business Success Club and Nail Tech Tribe, and scooped the Scratch Stars Nail Business Mentor Award in 2023. She identifies one of the biggest mistakes nail pros make when starting a business: “Most techs start backwards. They choose the services, business name, their branding and nail products before they think about who they want to service. Start by visualising your ideal client, and every decision afterwards should be centred around their needs.”

Once you have your ideal client in mind, it’s time to register your business. Most nail technicians set themselves up as a sole trader, granting them legal responsibility and control over their business decisions and finances.

Understanding Self Assessment

What is it & when to register?

Self Assessment is a system used by HMRC to calculate and collect Income Tax. You are only required to register for it if, in the last tax year (from 6 April to 5 April), you, as a self-employed sole trader, earned more than £1,000. To determine whether you have met this threshold, record and calculate your income and expenditure as you go. Once you reach this amount, you must register by the following 5 October.

Click here to access a step-by-step guide to registering as a sole trader.

Deadlines for sending your Self Assessment tax payment

The deadline for sending the tax return differs depending on your method of submission. If doing a paper tax return, the deadline to submit is 31 October at midnight, while the deadline for online submissions is midnight on 31 January. This is also the deadline to pay the tax, regardless of submission method.

Claiming business expenses through Self Assessment

The Self Assessment system also allows you to deduct business expenses and reduce your tax bill. Allowable expenses include products, cleaning supplies, tools, equipment, insurance and travel requirements. Keep records of your spending, such as bank statements and spending receipts, so you can calculate your expenses accurately.

An expert’s top tips for tracking finances

Award-winning accountancy and tax advisor for beauty businesses, Ria-Jaine Lincoln, aka The Beauty Accountant, shares advice for keeping track of finances:

1. “Introduce a process for tracking income and expenses.

2. Keep copies of all receipts and diaries, including online sales reports from bookkeeping systems.

3. Keep all tax references and gov.uk gateway logins in a safe place.

4. Keep business and personal transactions separate.

“Set one day per month as a ‘success day’, where you manage admin, such as keeping on top of your HMRC responsibilities and finances, assessing your business strategies, planning ways to aid your professional development and accounting for any upcoming training or event expenses that month,” Ria-Jaine continues. “Failing to keep on top of business admin is the fastest way to lose money as a small business owner. With late registration and incorrect tax returns, you will face penalties and likely miss out on tax relief from lost receipts.”

Click here to watch Scratch’s interview with Ria-Jaine, which details information about Self Assessment, upcoming tax changes for self-employed businesses, the Making Tax Digital scheme and business tips.

Click here to read Scratch’s full self-employment feature in our digital magazine.