Last checked 19 October 2026
Quick answer
If you’re a self-employed hairdresser, barber or beauty therapist, MTD for Income Tax applies once your qualifying income is over £50,000 (from 6 April 2026), £30,000 (from 6 April 2027) or £20,000 (from 6 April 2028), according to GOV.UK. HMRC’s notes say turnover includes tips. Wages from a salon taxed through PAYE don’t count.
This is general information, not tax advice. Check GOV.UK or speak to an accountant about your situation. Why we say this.
This guide is for self-employed hairdressers, barbers, beauty therapists and nail technicians, including chair and room renters, mobile stylists and salon owners who trade as sole traders.
What changes
Digital records
Your self-employment and property income and expenses are kept in compatible software. Spreadsheets can still be used with software that links to them.
Quarterly updates
Every 3 months your software sends HMRC a summary of income and expenses for each business. It isn’t a tax return.
A tax return at the end
You still submit one tax return a year, using your software, and pay your tax bill by 31 January after the tax year ends.
Does MTD for Income Tax apply to you?
GOV.UK says you need to use MTD for Income Tax if you’re a sole trader or landlord registered for Self Assessment, you get income from self-employment or property (or both), and your qualifying income is over the threshold for the relevant tax year. Qualifying income is your total self-employment and property income before expenses (turnover), not your profit.
| Qualifying income on your tax return for | Over | You’ll need to use MTD from |
|---|---|---|
| 2024 to 2025 | £50,000 | 6 April 2026 |
| 2025 to 2026 | £30,000 | 6 April 2027 |
| 2026 to 2027 | £20,000 | 6 April 2028 |
Source: Find out if and when you need to use Making Tax Digital for Income Tax, GOV.UK.
Employment status matters here. HMRC’s hair and beauty guidance explains that you’re either employed or self-employed for tax, depending on your contract and how you actually work, and gives a stylist renting a chair to serve their own clients as an example of self-employment. Employment income taxed through PAYE doesn’t count towards qualifying income. If you’re employed by a salon and also see private clients, only the private-client turnover (plus any property income) is tested. The same HMRC page says that if you work through a limited company, company income goes on a Corporation Tax return.
Even without a letter from HMRC, GOV.UK says it’s your responsibility to check. Its checker tool can help.
What you’ll need to keep digitally
GOV.UK says each digital record needs the amount, the date and a category (the same categories as Self Assessment). You also keep supporting records, such as bank statements and invoices, for at least 5 years after the 31 January deadline.
For hair and beauty, that typically means:
- Takings for services and product sales, whether paid in cash, by card or by bank transfer.
- Tips. HMRC’s self-employment notes say turnover includes “tips, fees and commissions”, along with all payments by cash, card or any other method.
- Card reader payouts. If a payment provider pays you after taking its fee, GOV.UK’s digital records guidance says to record the full income and the fees separately.
- Chair or room rent you pay, products, equipment, training and protective clothing such as aprons. GOV.UK’s expenses guide explains which costs are allowable.
If you rent out chairs in your salon, that rent is income you need to keep digital records of. GOV.UK’s digital records guidance says you need to create and store digital records of your self-employment and property income and expenses. How the rent is treated for tax can depend on your setup, so check with HMRC or an accountant if you’re not sure.
If your turnover is under the VAT threshold of £90,000, GOV.UK says a sole trader can choose simpler categorisation, recording only whether each transaction is income or an expense.
Key dates
If your qualifying income for 2025 to 2026 is over £30,000, GOV.UK’s published update periods give these dates for your first MTD year, on standard update periods:
- 6 April 2027: MTD starts and your digital records begin
- 7 August 2027: first quarterly update (6 April to 5 July 2027)
- 7 November 2027: second quarterly update (6 April to 5 October 2027)
- 7 February 2028: third quarterly update (6 April 2027 to 5 January 2028)
- 7 May 2028: fourth quarterly update (6 April 2027 to 5 April 2028)
- 31 January 2029: tax return and tax bill for 2027 to 2028
Sources: Send quarterly updates and Submit your tax return, GOV.UK. See our MTD quarterly deadlines 2027 to 2028 page for calendar update periods, and penalty points for late updates.
Free MTD deadline calendar
Add these dates to your phone or computer calendar. No email address or sign-up needed. Download the MTD key dates calendar (.ics)
What kind of software you’ll need
HMRC doesn’t provide software. GOV.UK says yours must create digital records, send quarterly updates and submit your tax return. Some software creates records itself; bridging software connects to records you already keep, such as spreadsheets. If you already use a booking or till system, GOV.UK says software that only takes bookings or records sales doesn’t need to be digitally linked; your digital records still need to be created in compatible software. HMRC’s find software tool lists products that have been through its recognition process. We don’t recommend particular products.
Cash and card takings
Clients often pay in cash, and tips are often cash too. All of it goes into your digital records, along with card payments. HMRC’s self-employment notes say turnover includes all payments, whether by cash, card, cheque or any other method, and tips.
Tip
GOV.UK says you should create digital records as close to the date of the transaction as possible. A quick note of cash takings each day helps.
Questions people ask
Do I pay tax every quarter?
No. Quarterly updates are summaries of income and expenses. GOV.UK says MTD won’t change the way you pay tax or the dates payments are due.
I rent a chair in a salon. Am I self-employed?
It depends on how you actually work, not only what your contract says. HMRC’s hair and beauty guidance lists signs of each, and points to its check employment status for tax tool.
Next steps
- Work out your qualifying income: the £30,000 threshold explained
- How to sign up for Making Tax Digital
- MTD quarterly updates explained
- Allowable expenses for sole traders
- What business records to keep
- The VAT registration threshold explained
- How much tax to set aside
Sources
All checked on 19 October 2026.
- Find out if and when you need to use Making Tax Digital for Income Tax (updated 26 March 2026)
- Work out your qualifying income for Making Tax Digital for Income Tax (updated 11 September 2026)
- Create digital records (updated 16 July 2026)
- Send quarterly updates (updated 16 October 2026)
- Submit your tax return (updated 16 July 2026)
- Choose the right software for Making Tax Digital for Income Tax (updated 13 July 2026)
- Find software that works with Making Tax Digital for Income Tax
- Check employment status if you work in hair and beauty (published 9 May 2025)
- Self-employment (full) notes 2026 (SA103F Notes), HMRC
- Expenses if you’re self-employed