The end of the 2024/25 tax year is fast approaching! With only one month left, now is the time to implement smart tax-saving strategies for your nail salon. These four crucial tips will help you legally optimise your taxes and reduce your tax liability.

Reduce Tax by Paying Family Members

If your family members help out in your salon—whether by managing appointments, handling cleaning, or assisting with customer service—you can pay them a reasonable salary. This reduces your taxable profit while fairly compensating their contributions.

Important Notes:

• 
  
  • – The salary must be appropriate for the work performed.

 

• • – Keep clear payroll records to comply with HMRC regulations.
  
  

  By ensuring their wages are recorded correctly, you can legally lower your taxable income while benefiting your family.

Claim VAT Refunds on Business Expenses

If your salon is VAT-registered, you can reclaim VAT on eligible business expenses, which helps lower your overall tax burden.

You can reclaim VAT on:

• 
  
  • – Gel polish, tools, and salon equipment

 

• • – Salon rent (if VAT is included)

 

• • – Accounting services and management software
  
  

  Important: Only claim VAT refunds if you have valid invoices from suppliers. Ensuring proper documentation prevents issues with HMRC audits and maximises your eligible refunds.

Check Your Pension Contribution Allowance

Contributing to a private pension before 5th April can significantly reduce your income tax, especially if you are in a higher tax bracket.

Why is this beneficial?

• 
  
  • – Contributions reduce your taxable income, leading to lower overall tax liability.

 

• • – You benefit from tax relief on pension contributions, helping you secure future financial stability.
  
  

  Take advantage of this allowance now to maximise both your retirement savings and tax efficiency.

Make Use of the Annual Investment Allowance (AIA)

The AIA allows you to deduct 100% of the cost of qualifying equipment purchases from your taxable profit, up to £1 million.

Eligible expenses include:

• 
  
  • – Hot towel machines

 

• • – Massage chairs

 

• • – Ventilation systems and other salon equipment
  
  

  By making necessary purchases before the tax year ends, you can reduce your taxable profit while upgrading your business assets.

Final Reminder: Act Now!

The 5th April deadline is fast approaching! Implement these strategies now to legally reduce your tax burden and optimise your nail salon’s financial health.

For expert tax advice tailored to your salon, consult a qualified accountant today!