Making Tax Digital · Sole traders
Tattoo artists: tracking studio rent, supplies and licence costs
ONLY£15A MONTHTattoo work combines customer deposits, session payments, studio arrangements and specialised supplies.
Tattoo work combines customer deposits, session payments, studio arrangements and specialised supplies. Clear records need to show whose sale it is and what the studio retains. A net transfer from the studio is not always the full picture of the artist's income and costs.
Understand the studio agreement
Check whether you rent space, pay a percentage fee, receive employment income or operate under another arrangement. The description “self-employed artist” does not settle the tax status without the actual facts.
For a genuine sole-trader business, assess needles, cartridges, inks, barrier products, cleaning supplies, clinical waste services and appropriate insurance as business costs. Durable equipment and private use need separate treatment. Local registration and licensing requirements vary, so retain the actual council paperwork rather than relying on a generic list.
Keep booking money traceable
Record customer advance payments, final balances, refunds and any amounts held for someone else. Under cash basis, genuine trading receipts are generally recorded when received; a refundable security amount may require different analysis.
Keep appointment references sufficient to reconcile the money without copying unnecessary personal or health information into the accounts. A financial ledger should not become a duplicate clinical-consent record.
Worked example: the studio percentage
An artist earns £1,000 from customer work and pays a £300 studio fee under the agreement. If the studio collects as agent and transfers £700, the artist's records need to explain the £1,000 income and separate £300 cost.
If the contract instead makes the studio the supplier and the artist receives a different agreed payment for services, establish that arrangement before applying the same accounting. Follow the substance of the transaction.
Start with the business purpose
An expense category describes a cost; it does not decide whether the cost qualifies for relief. The starting point is whether the spending was for the trade. Where an identifiable part was private, keep that part out of the claim. A personal withdrawal is not an expense simply because it leaves the business bank account.
HMRC's self-employed expenses guide explains the distinction between running costs, capital expenditure and private use. For example, a supplier may sell both equipment and household products. The shop's name is useful evidence, but the invoice tells you what you bought.
Record the full transaction and the business calculation clearly. If a £120 bill has £30 of identifiable private spending, a £90 business claim is easier to explain when both amounts and the reason for the split are retained. Do not delete the private part merely to force the bookkeeping total to resemble the tax deduction.
Nor is a deduction a reimbursement. Spending £100 to save a fraction of that amount in tax still leaves you with a real cost. Buy what the business needs, keep appropriate evidence and claim the relief available under the correct rules.
Reconcile receipts, not just bank payouts
A bank deposit is not always the original sale. A platform, card processor or agent may deduct fees before sending you the balance. Keep the statement showing the gross amount, deductions, refunds and final payout, then explain the difference in your records.
Cash needs the same attention. Record customer cash when received under the cash basis, even if some of it is spent before the rest reaches the bank. Banking cash already recorded as a sale is a transfer between your cash and bank records, not another sale.
HMRC's record-keeping guidance covers income and business expenses. The useful practical test is whether another person could follow a payment from the original sale to the amount received without counting it twice.
Do not use bank feeds as a reason to ignore payment accounts, credit cards, cash or payments made personally for the business. List every place where business money passes, choose the source for each type of transaction and review transfers between those sources. This turns reconciliation into a repeatable check rather than a search through several unrelated statements.
Share the information needed for the task
Tax records need to be useful without containing unnecessary personal detail. Keep payment references sufficient to reconcile the accounts, and hold sensitive client notes in the appropriate restricted system. Financial software should not become a second, informal store for clinical notes or identity documents.
Use individual accounts and the access controls available for the service. Remove access when a working relationship ends. A secure product can still be misused through shared sign-ins, forwarded access links or files sent to the wrong person.
For Open Banking, distinguish account-information access from payment initiation. Read the consent screen and check the authorised provider. Account-information permission does not itself authorise moving money, but Open Banking as a whole also includes separately authorised payment services. The FCA explains these different services.
If you need an assurance about encryption, hosting, retention or security testing, ask for the current documented answer. Terms such as “bank-grade” do not tell you which controls apply to a particular service. Choose a workflow whose permissions and responsibilities you understand, and protect the email or phone account used to recover access.
Review the specialist costs
Save supplier invoices and licence renewals, distinguish equipment from consumables and reconcile deposits to completed work or refunds. Keep sensitive customer details in the appropriate restricted system and use references in the financial records.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.