Bookkeeping for freelancers in hair and beauty

Which VAT rate applies to which treatment?

Hairdressing services fall under the reduced 9% rate. Cutting, washing, blow-drying, colouring and perming: you charge 9% VAT on those services. That reduced rate is meant for the hairdressing trade itself, so it does not automatically apply to everything you do in the salon.

Beauty treatments fall under the general 21% rate. Think of facials, massages, brows, lashes, nails and pedicure treatments without a medical basis. If you do both, for example as a hairdresser who also shapes brows, you work with two rates side by side and your till or invoice needs to split them cleanly.

Reselling products: always 21%

If you sell shampoo, hairspray, skincare or nail polish to your clients, you charge 21% VAT on it. Even when the client pays for those products together with a 9% haircut. One receipt then carries two rates, and your VAT return must show the turnover per rate separately.

Purchasing those products is simply a business expense: you deduct the VAT on your purchase invoices as input tax. Do note the difference between products for resale and products used in the salon. Both are business costs, but for your stock management and your margin you want to keep them separate.

Cash records: this is what the tax authorities look at

In hair and beauty, a relatively large share of payments is still made in cash or by card without an invoice. That is exactly why the tax authorities pay close attention to cash records in this sector. Keep a cash book in which you record your cash receipts and expenses daily, and count your till regularly. A till that structurally fails to match your cash book is a classic trigger for questions.

If you use a till system or booking app, keep the daily closings and reports. Together with your card statements and cash book, they form the basis of your revenue records. Do not throw anything away: the seven-year retention obligation also covers till receipts and digital reports.

Costs you deduct as a hair or beauty professional

Your scissors, clippers, equipment, treatment chair, products, branded workwear, professional training and the rent of your space or chair are business costs. More expensive equipment, such as a treatment chair or laser device above 450 euros excluding VAT, is depreciated over several years. If you invest more than 2,900 euros in a year, the small-scale investment deduction often comes on top.

If you meet the 1,225-hour criterion per year, you are also entitled to the self-employed deduction of 1,200 euros and, as a starter, possibly the starter's deduction of 2,123 euros. Treatment hours count, but so do cleaning, purchasing, administration and training.

The small business scheme: attractive, but do the maths

If your turnover stays below 20,000 euros per year, you can opt for the small business scheme (KOR). You then charge no VAT and file no VAT returns. For a mobile hairdresser with mainly private clients that can be attractive: you become 9% cheaper or keep more margin. But you also lose the deduction of input VAT on your purchases and investments. If you are about to invest heavily in equipment or your own salon, the KOR often works against you.

Keeping it workable

The common thread in this sector: split your turnover per VAT rate, keep your cash records daily and store everything digitally. Set up your till system or invoice template properly once, with the right rates per service and product, and the rest of your bookkeeping follows naturally. If you are unsure about the rate for a specific treatment or about the KOR, have it calculated before making a choice that locks you in for a year.