Making Tax Digital · Sole traders
Dog groomers: hydrobaths, blade sharpening, salon utilities, and MTD
ONLY£15A MONTHA practical guide to grooming equipment, mobile van conversions, salon utilities, card fees and Making Tax Digital records for sole traders.
A fully booked grooming diary is encouraging, but it does not show what the business has earned after shampoo, sharpening, water and equipment costs. A hydrobath replacement can change the picture considerably.
For salon, home-based and mobile groomers, Making Tax Digital works best with records that distinguish everyday supplies from equipment purchases and personal spending. The same approach also makes it easier to understand whether your prices cover the work involved.
When Making Tax Digital applies
Making Tax Digital for Income Tax changes how qualifying sole traders and landlords keep records and report income. Under HMRC’s timetable, the starting points are:
- From 6 April 2026, if qualifying income exceeded £50,000 in 2024–25.
- From 6 April 2027, if qualifying income exceeded £30,000 in 2025–26.
- From 6 April 2028, if qualifying income exceeded £20,000 in 2026–27.
Qualifying income generally means gross self-employment and property income combined, before expenses. Salary, pension income and dividends do not count towards this particular test. Check HMRC’s qualifying income guidance, including the treatment of VAT and shorter accounting periods where relevant.
The test uses the relevant earlier tax year; passing a figure during a busy month does not mean you join that day. Exemptions can apply. These rules concern your individual business and property income, rather than a limited company’s Corporation Tax reporting.
Hydrobaths, dryers and grooming tables
Hydrobaths, high-velocity dryers and electric grooming tables can be business equipment. Whether their cost is deducted immediately depends on your accounting method and the purchase arrangement.
Under the cash basis, most eligible equipment is deducted when paid for. Traditional accounting normally uses capital allowances, potentially including the annual investment allowance. Accounting depreciation is not itself deductible for tax.
Keep the purchase invoice even if you pay through finance. An ordinary loan capital repayment is not another expense in addition to the equipment cost. For hire purchase or leasing, retain the agreement so the payment can be treated correctly.
Mobile grooming conversions need detail
A conversion can include the vehicle, fixed plumbing, a bath, electrical equipment and storage. Ask for itemised invoices and record whether equipment is separately owned. The treatment of the van and the installed assets depends on the facts and your chosen vehicle method.
If you use simplified mileage for an eligible vehicle, do not separately deduct costs already covered by that method. Avoid assuming a complete mobile conversion can be claimed in addition to mileage without reviewing what each element represents.
Everyday grooming expenses
Section 34 of the Income Tax (Trading and Other Income) Act 2005 requires a business purpose for expenses. HMRC’s guidance explains why private use must be considered.
Typical business records include:
- Professional shampoos, conditioners and appropriate grooming consumables.
- Replacement clipper blades, scissors and sharpening services.
- Protective gloves, suitable protective clothing and cleaning materials.
- Business insurance, booking software and commercial waste services.
- Products lawfully used or supplied as part of the grooming business.
The tax treatment of a product does not determine whether you may administer it to an animal. Keep any questions about treatment permissions separate from the expense claim. Equally, grooming your own pet does not make all of its care costs business expenditure.
Water, electricity and premises
Commercial salon rent, business water charges and electricity can be allowable. Keep the actual bills and check whether utilities are already included in rent. Claiming an all-inclusive rent and then adding an estimated utility amount duplicates the cost.
For a home salon, make a reasonable business allocation. A dedicated meter or evidence of equipment use can help explain substantial water or power costs. HMRC’s premises guidance covers eligible business premises expenses and appropriate homeworking proportions.
A new salon extension or substantial structural conversion is different from ordinary maintenance. Do not assume the cash basis makes all building expenditure deductible immediately. Keep separate quotations for alterations, repairs and movable equipment.
Worked example: card receipts and a new dryer
Jules is not VAT registered and uses the cash basis. During a reporting period, clients pay £9,000 by card and £1,000 in cash. The card provider retains £180 in fees. Jules also pays for a dryer used wholly in the existing business.
| Item | Amount |
|---|---|
| Gross client receipts | £10,000 |
| Card processing fees | £180 |
| New dryer paid for | £900 |
| Shampoo and sharpening paid for | £420 |
| Rent and utilities paid for | £1,600 |
| Provisional result before other costs | £6,900 |
The card settlement is £8,820, but the card income is £9,000. The £1,000 cash is recorded when received; later banking it does not create another sale. The dryer deduction assumes an eligible outright equipment purchase, with no private use.
This is a business result, not Jules’s final tax liability. Other costs, annual income and personal circumstances still affect the calculation.
A useful review at the end of the week
Compare completed appointments with payments, cancellations and refunds. Keep processor statements from SumUp, Zettle or your chosen provider to explain settlement deductions. Note equipment purchases and mixed-use costs while the details are fresh.
Avona AI can support categorisation, while your invoices establish the purpose and treatment of each cost. A current profit estimate can help you plan a tax reserve, but it remains an estimate until the full annual position is known.
A manageable quarterly routine
For a business using standard tax-year periods, the 2026–27 quarterly update deadlines are 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027. Updates are cumulative: each covers the tax year so far. Calendar update periods are also available, with the same deadlines.
Keep digital income and expense records, reconcile them regularly and send the required totals through compatible software. The Income Tax (Digital Obligations) Regulations 2026 underpin the requirements; HMRC’s digital record-keeping notice explains the applicable directions. A bank feed needs supporting detail wherever a payment conceals fees, private purchases or several transactions.
Normally, record the transaction date, amount and relevant category, retaining supporting invoices or receipts. HMRC’s digital records guidance explains permitted simplifications and digital links where more than one software product is used.
Quarterly updates do not replace the annual tax return. The 2026–27 return is due by 31 January 2028, and normal tax payment dates continue. HMRC is not applying late quarterly update penalties for 2026–27, but digital records and updates are still required. That first-year approach does not waive other filing or payment obligations.
Give the business finances a regular appointment
Clear takings and equipment records make reporting easier to manage alongside a busy salon. Explore Avona.app at £15/month, or Avona Concierge, managed by chartered accountants, starting from £60/month, for ongoing help with your accounts.