Payment to stylists

[Karl Sorrell]

Good Afternoon

We are a succesful hairdressers with approximately 10 self-employed stylists. In a busy mall we run all the cash and card payments through the till and process the money on the following monday by taking their chair rent, charging for use of stock and pdq then paying all staff in cash. This is causing an ever increasing problem in that we are getting more and more pdq payments and the percentage means we regularily do not have enough cash to pay staff so we have to do runs to the bank to withdraw etc.

Our accountant has suggested that we could pay the staff directly into their bank account but previously we have avoided this as we were told that the staff could be considered salaried therefore we would have to pay tax, NI etc.

Is this still the case? the above information was originally given for our (still open) high street salon where the staff take the cash themselves and pay us their chair rent but as this system is just not feasible in our mall salon (its very very busy and open so rife for tin-theft) we therefore use the other method.

thank you in advance.

Regards

 

[CFBS]

At the salon where I go for my hairdressing, they are all self-employed and each person has their own card machine and tally up their own cash and cheque payments. Could that work for you - so you only need to top up their card takings in cash if you see what I mean.

 

[Karl Sorrell]

At the salon where I go for my hairdressing, they are all self-employed and each person has their own card machine and tally up their own cash and cheque payments. Could that work for you - so you only need to top up their card takings in cash if you see what I mean.

We do that at the smaller salon but the larger mall salon just isn't feabile ... we've already had an iPad stolen from the shop as on a Saturday its so busy you can't see anything.

 

[CFBS]

We do that at the smaller salon but the larger mall salon just isn't feabile ... we've already had an iPad stolen from the shop as on a Saturday its so busy you can't see anything.

Can you afford to pay a receptionist who stays on the desk minding security and taking the money? He/she could also keep a tally of everyone's takings to make it quicker at the end of the day to work out who gets paid what.

 

[AcidPerm]

Why not ring HMRC for clarification? Their guidelines suggest to me that your approach of direct payments should be ok.

http://www.salongeek.com/threads/hmrc-guidelines-for-determining-self-employment.295298/

See the section headed 4. Money.

 

[daydreams01]

From my understanding, you can pay them their payments directly into their account but they need to give you an invoice for what is owed to them. They could prob do this on a fortnightly or monthly basis.

 

[Nemo]

All my girls give me an invoice and I pay straight to the bank. They are very much self employed and take care of their own tax an NI. They work out their % split and all client money goes through the till and I get a weekly invoice. Works very well for us.

 

[squidgernetball]

If you take all the money, does this not count as incomings meaning you could be vat registered when you perhaps don't need to be? Shouldn't the s/e staff take their money then pay you what they owe you? This is then your true takings.

Just wondering how it works x

 

[Karl Sorrell]

Thanks for all the replies.

Had a read of the link (really appreciate that) so I will ring hmrc tomorrow when I am back in the office but as to the girls (and boys as we have a barbers in the same premises) invoicing us, to be honest I don't think its likely. The majority of the girls are young(ish) mums and bookkeeping isn't their strong point. We have a reporting system that calculates everyones sales so we know how much they owe us as their chair rent but we don't allow them access to these reports apart from providing them a summary each week to show the calculation of their charge.

As for the vat registration, we are vat registered but only because the portion of the sales that we receive is over the threshold so we don't pay vat on the girls earnings (hope that makes sense).