What exactly is VAT?
VAT stands for value added tax its current rate is 20% that means that all services that the hair salon provides has to add 20% on in tax. This tax is calculated then paid to your tax man every 3 months or financial quarter. This applies tosalon hair straightenersall services and product or service sales.
Who Pays It
Any business, individual (sole trader) who earns in excess of 77,000 in twelve months you then need to register for Vat inside of thirty days. It is the present rate you ought to keep an eye on the rate this may possibly change at any given budget which means you will need sometimes to verify the budget that is certainly boring I know but could help save you a lot of hassle in the future.
If you bring in below this limit and trade in the UK you should not need to register for VAT but I advise you check out at theHMRCwebsite page and also check with your accountant who ought to keep you up to date of any budget changes.
Recording Salon Income Keeping Records
The secret to not getting mixed up with vat and maintaining on top of issues for your salon is record keeping which for imaginative types like ourselves is not our strongest point. Plus everyone hates holding monitor of revenue receipts you just would like to get on with what you love that's hairdressing. But as you'll read from above if you're near the limit it pays to plan first and get methods in place prior to the date. As a hair salon there are highly busy instances where the whole salon will just be focused on clientele that is a great thing but be sure to set aside some time for you to organise this along with your accountant to get off on the proper document keeping start.
Some simple recommendations
Some say the simplest ideas are the best but you could just hold it all paper receipt centered so essentially you've got what's generally known as a part book and every sale made you make you write down the service amount and quantity of tax the customer gets a duplicate along with your salon keeps a copy legally the receipt must state your company name and address plus vat number and also a date.
Another option is some tills can also be setup so they manage vat so when you make your finish of day till cash up you hit a button and it displays a breakdown with the days takings and the VAT aspect. You would have already have provided receipts to clients the till receipt programmed has all the legal information on it.
Another suggestions include further advanced salon systems that are fantastic for recording sales managing books and inventory they are fantastic for instantaneous information of vat and sales they can also be quite high priced although they are systems available in the market that are what's referred to as open source for taking and managing bookings a quick search for salon booking software open source will bring them up. If you do not want all the trouble you'll find suppliers who have Internet methods along as your salon has a connection you can access there application usually these are at a month to month fee.
If you aren't vat registered maintain a close eye to your takings before you hit the threshold
Prepare if you get near think about record saving chat to your accountant
If you have not got an tax advisor and are seeking to decide on one for your salon watch out for my next article.