If you're a barber or hairstylist running your own chair, booth, or shop in the UK, Making Tax Digital for Income Tax (MTD For ITSA) is about to change how you report your earnings to HMRC. Starting from April 2026, many self-employed barbers will need to keep digital records, submit quarterly updates and a final tax return to HMRC.
This guide breaks down everything you need to know about MTD for barbers, including who needs to sign up, when you need to start, what software you'll need, and how to stay compliant without the stress.
What is Making Tax Digital for Barbers?
Making Tax Digital for Income Tax is HMRC's initiative to modernise the tax system by requiring self-employed individuals and landlords to:
Keep digital records of income and expenses
Send quarterly updates to HMRC every three months
Submit an annual tax return through compatible software
For barbers working as sole traders, this means moving away from shoeboxes full of receipts and manual record-keeping to digital systems that integrate with HMRC's online platform.
Does MTD Apply to Your Barbering Business?
Not every barber needs to join MTD immediately. Whether you're affected depends on your qualifying income – the total gross income from your self-employment and property income if there is any, before expenses.
Income Thresholds for Barbers
Example: If your barbershop earned £55,000 in gross income during the 2024-25 tax year, you'll need to start using MTD from 6 April 2026 since your gross income exceeds the threshold for that tax year.
What Counts as Qualifying Income Under MTD for Barbers?
Qualifying Income includes:
All fees from haircuts, styling, and grooming services
Income from product sales (shampoos, styling products, etc.)
Tips and gratuities (if declared as business income)
Mobile barbering services
Income from renting chairs to other barbers (if structured as self-employment)
Does NOT include:
PAYE employment income (if you also work as an employee)
Dividend income
Pension income
Working Out Your Qualifying Income For Barbers
Your qualifying income is calculated before you deduct expenses like:
Rent for your chair or shop space
Equipment and supplies (scissors, clippers, razors)
Product costs
Utilities and insurance
Marketing and advertising
For Example: Even if you made £60,000 in sales but had £40,000 in expenses (leaving £20,000 profit), your qualifying income is still £60,000 for MTD purposes.
Who is Exempt from MTD for Barbers?
Some barbers may be exempt from MTD for barbers, either permanently or temporarily.
Type of Exemption | Description |
|---|---|
Permanent Exemptions | You're automatically exempt if you:
|
Digital Exclusion Exemption | You can apply for an exemption if you're digitally excluded, meaning:
|
Temporary Exemptions | Certain circumstances may give you temporary exemption until April 2027, including:
|
If you think you qualify for an exemption, check HMRC's guidance or speak with your accountant before assuming you're exempt.
What Barbers Need to Do for Making Tax Digital for ITSA?
Get HMRC - Recognised MTD Software
You’ll need to use HMRC-recognised software to comply with Making Tax Digital for barbers. This software allows you to create and store digital records of your income and expenses, send quarterly updates to HMRC, and submit your annual tax return through a single, compliant system.
MTD Software Options for Barbers:
Full-feature accounting software that creates digital records and submits to HMRC
Bridging software that connects your existing spreadsheets to HMRC
Barbershop-specific features to look for:
Bank feed integration (automatic transaction import)
Receipt scanning via mobile app
Expense categorisation
Mileage tracking (for mobile barbers)
Multiple income source support (if you rent chairs)
Create Digital Records Under MTD for Barbers
You must keep digital records of:
Income:
Daily takings from services
Product sales
Tips (if declared)
Any other barbering-related income
Property related income if any
Expenses:
Rent and booth fees
Equipment purchases (scissors, clippers, chairs)
Consumables (shampoos, conditioners, styling products)
Utilities and insurance
Marketing and website costs
Professional subscriptions
Mobile costs (business portion)
Vehicle expenses (if mobile barber)
Training and education
Record Requirements for Making Tax Digital for Barbers:
Amount of each transaction
Date of transaction
Category (type of income or expense)
Note
Simplified Record-Keeping Option: If your annual turnover is below £90,000, you can use simplified categorisation, recording transactions simply as "income" or "expense" without detailed categories.
Send Quarterly Updates For MTD Compliance
After setting up your software, you'll send quarterly updates to HMRC showing your income and expenses for each three-month period. HMRC allows two different ways to structure these updates: standard tax-year quarters and calendar-month quarters.
The standard quarterly option follows the UK tax year and runs from 6 April. Alternatively, you can choose calendar-month quarters, which run from the first to the last day of the month. This option is often preferred by barbers and other self-employed workers who already manage their finances monthly, use monthly bank statements, or rely on bookkeeping software that reports by calendar month.
Update | Standard Quarter Period | Calendar Quarter Period | Submission Deadline |
|---|---|---|---|
Q1 | 6 April – 5 July | 1 April – 30 June | 7 August |
Q2 | 6 July – 5 October | 1 July – 30 September | 7 November |
Q3 | 6 October – 5 January | 1 October – 31 December | 7 February |
Q4 | 6 January – 5 April | 1 January – 31 March | 7 May |
Whichever option you choose to comply Making Tax Digital for barbers, the submission deadlines stay the same, and each quarterly submission shows cumulative totals from the start of the tax year. You must choose one method and use it consistently for the entire tax year.
Submit Your Annual Tax Return
By 31 January following the end of the tax year of MTD for barbers, you'll need to:
Make any final adjustments (capital allowances, etc.)
Declare other income sources (if any)
Finalise your tax position
Submit your tax return through MTD software
Why Choose RentalBux for MTD for Barbers?
HMRC-Recognised & Built for Compliance: RentalBux is fully HMRC-recognised for Making Tax Digital, helping sole traders stay compliant with quarterly updates and annual submissions without complex accounting.
Designed for Sole Traders: Built by accountants, RentalBux supports self-employed professionals—including barbers, who need simple digital records without unnecessary features.
Works With Your Existing Setup: Use RentalBux on its own or alongside your accountant. It also supports spreadsheet uploads, making it easy to transition without changing how you currently work.
Quarterly Updates Made Simple: Record transactions directly or upload spreadsheets to submit HMRC-ready quarterly updates in minutes.
One Dashboard for Everything : Track income, manage expenses, and review reports in one clear dashboard—giving you visibility over your tax position throughout the year.
Secure & Regulated : FCA-authorised for account information services, GDPR-compliant, and SSL secured—your financial data stays protected.
Free to Start You can start preparing for MTD at no cost, with the option to upgrade or book a demo when you’re ready.
Penalties for Non-Compliance: What Barbers Need to Know
MTD for ITSA introduces a new points-based penalty system, but there's good news for those starting in April 2026.
Late Submission MTD Penalties for Barbers (From 2027–28 Onwards)
Under Making Tax Digital for Income Tax for barbers, HMRC operates a points-based penalty system for late submissions. Each late submission adds one penalty point, and once the relevant threshold is reached, a £200 penalty is charged. Quarterly and annual obligations are tracked separately.
Quarterly Filers (Quarterly Updates)
For quarterly updates, HMRC adds one penalty point for each late submission. Once you accumulate four penalty points, a £200 penalty is issued. After this penalty has been triggered, every further late quarterly update results in an additional £200 charge, although no further points are added. Quarterly penalty points are entirely separate from those applied to annual returns.
Resetting Quarterly Penalty Points
Quarterly penalty points will reset to zero only when both of the following conditions are met:
All quarterly updates are submitted on time for 12 consecutive months, and
All quarterly submissions that were due in the previous 24 months have been filed with HMRC (even if some were late)
Annual Filers – Late Submission Penalties
For annual tax returns, HMRC adds one penalty point each time a return is filed late. When two penalty points are reached, a £200 penalty is applied. After this point, every additional late annual return attracts another £200 penalty, with no further points added. Annual penalty points are tracked independently from quarterly penalties.
Resetting Annual Penalty Points
Annual penalty points will reset to zero only when both of the following conditions are met:
All annual returns are submitted on time for 24 consecutive months, and
All submissions due in the previous 24 months have been received by HMRC
Key Changes in MTD Rule For Barber:
Barbers joining MTD in April 2026 will not receive penalty points for late quarterly updates during the 2026-27 tax year.
This "soft landing" gives you time to adjust to the new system.
Important: This relief only applies to quarterly update penalties. You can still face penalties for:
Late annual tax return submission
Late payment of tax bills
Also, In the first year of the new penalty system, taxpayers are given an extra 15 days, meaning they have a total of 30 days to pay any outstanding tax before a late payment penalty applies.
Late Payment MTD Penalties for Barbers
These apply immediately, even in your first year:
Time after tax due date | Late payment penalty |
|---|---|
Within 15 days | No late payment penalty |
16 to 30 days late | 3% of outstanding tax (4% from April 2027) |
30 days late | Extra 3% of outstanding tax (4% from April 2027) |
From day 31 onwards | 10% per year on unpaid tax, calculated daily |
How to Avoid Payment Penalties:
Set up a Time to Pay arrangement with HMRC before the penalty date.
Practical Tips for Barbers Transitioning to MTD
Even if you're not mandated until 2027 or 2028, early preparation helps:
