documenting free treatments

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hippy-chick

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on my record cards I put down every treatment and how much it has cost.

now I've also done this for free treatments, be it a raffle win, or freebies that I do for the staff as a promotion incentive.

but will I have to justify the free treatments if I get queried by the tax office?
 
to be honest, its mainly time that the client is paying for in our industry, so i guess product expense is minimal, therefore i doubt it really makes a difference. Ive never thought of it to be honest. Its up to me if i gve free treatments, not the tax office lol.
 
I know there's an entry for "Advertising & Promotion" on my accounting package that I use... so I'd probably be inclined to document any free treatments under that sort of banner. I think there would probably be a need to document this, as any time worked in the salon would need to be paid for at at least the minimum wage, and then there's also product usage too.
 
Hi. I don't think you need to "justify" the reason for a free treatment at all. All the tax office is interested in is how much tax you owe and if you have made an honest declaration. I guess they may become sus if you were offering a lot of free treatments - it could look like a way to cutting your tax bill as you will actually be making a loss by offering treatments as promotions or prizes. But as naughy girl Ruth says make sure you record the costs in the appropriate section on your accounts and on your tax return. Cheers.
 
I'd agree it should be recorded, as you are using product and time, so it should be shown as a loss on the accounts I would have thought.
 

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