are any of you VAT registered - if so how do you price your treatments?

Hell, no, i dont earn enough to be registered for vat!

How much do you need to be earning before you have to register?

The threshold is £54,000 turnover a year. Bit of a way to go yet!

Thanks for that Sharron, I'd only make that much in my dreams

£61,000 turnover is what my business advisor tells me.

You either have to add 17.5% to you prices and your profit will stay the same but obviously you can not be as competative as some other salons.

Or

You can cut into your profits to stay competative.

Both ways I can only see salon owners suffering for us collecting this tax for the gov.
The only plus is that you can claim your VAT back on purchases but in our industry our sourcing and cost of materials is not really that large to balance it out unless you sell a big enough amount of retail stuff.

VAT is the devil.
For this reason I can see why so many builders, plumbers and taxi drivers keep there turnover under the threshold nudge nudge wink wink styleee.
They deal with cash so there's no way it all goes through the books unless they are making big bucks.
^^^ only in my opinion of course.

My husband is a carpenter with his pwn business and he is VAT registered. He does not turn over the threshold amount but you can go voluntary VAT registered if you want to. We did it because everything that he does, materials, courses, diesel etc has VAT on it plus the huge purchase of his van which had a big amount on.

Most people who employ him to work don't mind paying the VAT as they kind of expect it from the building trade.

I just wondered if any one does it here? And how about big salons that do loads of business. Do they really not make it to the threshold?

it's not too hard to hit the threshold for a salon.
that's only 7 full sets @ £25
or if you do a bit less full sets it's them plus the sunbeds and some beauty.

I can see why your hubby would go VAT reg as because of his materials etc.

so are these salons not VAT reg'd then?

A lot of people working in these salons are self-employed and pay a 'rent' to the salon owner. That keeps the turnover down considerably!

Unless I am mistaken, that (rent) would keep the net profit down.

Turnover is sales revenue... so if over £61k goes through the till you have to be VAT registered.

I've done some calculations just out of interest sake , and the figures are as follows:

365 days a year - 54 days = 311 days a year (6 day week)

If you do 5.4 sets per day at £35, every day for a 6 day week, for 54 weeks a year, you will earn £61,236.


Just think about it, you won't have a life, you'll be dead tired, you won't have any holidays, but you'll have a lot of money in the bank ........


Marlise

I wish I could earn 54 grand a year only working 2 days a week in the salon at the mo! Watch out though when I eventually go full time.

depends if your a 1 man band, in a salon this shouldn't be too much of a problem to reach that turnover...
This is 1 real day:
4 full sets
1 soak off
2 in fills
3 brow wax
1 bikini
3 tints

Just that takes you over the threshold
Then go on to add your tanning and spray tanning and any retail
Your over even more.

Blimey Marlise, you want to come and live in my world, we only have 52 weeks in a year here

You're absolutely right though, you couldn't keep up that kind of work load day in, day out. Besides most of our business (nail wise) is rebalances, and we can't charge £35 for those unfortunately