Self assessment for hairdresser - HELP!!!

turbo_sammie

Hi all,

My hairdresser has asked me to do her tax return for her, which I did last year without too many problems, but she's started to query all of the expenses that I've disallowed as her previous accountant (who seems a bit dodgy) let her have quite alot as allowable. Basically, she's classed as self employed as she "rents" a chair in a salon (but receives a regular wage from the owner) and she's been at the same place of work for over 2 years. Because of this, I don't allow her to claim for anything except products and equipment (no travel expenses, no clothing, no subsistence, etc). She is now arguing that other hairdressers she works with all claim for cars that they lease, and I'm pretty sure this isn't right! I spoke to HMRC last year as I wanted to be clear on what was allowable, and they basically said that as she has a regular place of work, she's quite limited on what she can claim for. Is that correct? I don't want her to have to pay more tax than she should have to, but on the other hand I'm not going to make absolutely everything allowable just cos her hairdresser mates have accountants that do that!

Can anyone shed any light? I'm pulling my hair out here! :-(

burg

I would be skeptical about traveling. I very rarely allow subsistence unless I am very convinced. As for clothing. If it is protective or uniform then fine. Otherwise no.

A lease car might be possible for the others but the private use reduction would be high which they probably don't understand.

Try explaining your reasoning behind your advice. i.e. that you are making sure she keeps on the correct side of the law. Your job is to advise on what is acceptable and not, thus hopefully reducing the tax and also reducing the risk of enquiries and the severity of the penalties from an enquiry.

Personally I wouldn't contact HMRC for clarification as the chances of getting someone who actually knows what they are on about is slim at best.

turbo_sammie

Thanks for the reply Burg. I didn't allow any travel expenses for her last year, yet she still gave me all her fuel receipts again this year! Surely if you have a regular place of work then none of these costs are allowable? I try to think logically, that employed people aren't entitled to travel costs so why should someone who is technically self-employed but has a regular wage and place of work be entitled to this? This is the only tax return I do, and I do it as a favour just to get a bit of practice, but I'm starting to doubt myself and my knowledge! :-(

paulstafford

You are correct, the other 'accountants' are clueless