Beauty glossary

Annual investment allowance

The relief that writes off chairs, backwashes, dryers and most salon kit in full in the year of purchase. The year-end file keeps the invoices.

Auto-enrolment

Pension duties from the first employee: assessment, enrolment and the minimum employer contribution that lives inside the loaded hour.

Booked against billed

The two utilisation gaps: hours the diary filled against hours the team stood ready, then hours that actually billed. The demo room runs 80 per cent booked and 75 billed, and growth without new chairs lives in those two gaps.

Breakage

The share of vouchers never redeemed, £1,620 of the demo drawer. It becomes income on a written policy applied every year, never on hope in a good month.

Cancellation window

The published notice period before a deposit is kept. It makes the deposit defensible, the policy enforceable and the no-show rate fall.

Chair rental

Two businesses at one chair: the salon sells space at a fixed rent, the stylist sells treatments. Real when the renter controls their prices, hours, clients and money; theatre, and reclassified, when they do not.

Chair-hour

The room's overheads spread across every chair and open hour: £5.50 in the demo salon. Every treatment carries its minutes of it, and an unbooked hour costs it anyway.

Colour usage variance

Actual product per service against the standard: the demo cupboard runs £15.60 against £14.50, £46 a week of mixed-and-binned bowls, visible only when the cupboard is counted.

Commission model

Pay as a share of ex-VAT takings, 40 to 50 per cent commonly. It moves quiet-week risk to the stylist and never switches off the wage floor, which is checked weekly against hours worked.

Control test

The status question behind every rented chair: who sets prices, hours and the diary, whose money moves first, whether a substitute could work the chair. The room answers, not the agreement.

Deposit

Client money for a treatment not yet given: a liability until the appointment, and a deterrent priced better than it recovers. A kept deposit keeps its VAT, £15 banking £12.50.

Disaggregation

HMRC's name for splitting one salon into two businesses so each stays under the VAT threshold. Shared premises, tills, staff or branding let them direct the parts to be treated as one, with the VAT backdated.

Employers' liability

The £5 million minimum insurance required from the first employee, trial shifts included, certificate displayed. Renters carry their own cover instead, and the register holds a copy.

Fixed rent

The rent shape that keeps a chair genuinely rented: weekly or monthly money, invoiced, chased, reviewed annually. Percentage-of-takings rents read as profit sharing and drift toward employment.

Floor check

The weekly test that commission pay, averaged across hours actually worked, clears the minimum wage. A quiet week can put a commission stylist under the floor, and the top-up is the law.

Gift voucher

Cash in, service owed: a liability until redeemed, not revenue at the till. The demo drawer of £9,000 holds £7,380 of service owed. Most salon vouchers are single purpose, so VAT lands at the sale.

Kept deposit VAT

A no-show's forfeited deposit remains payment for the supply the salon stood ready to make, so the VAT stays: £15 kept banks £12.50, not £15.

Licence to occupy

The right paper for a rented chair: the stylist gets the chair and shared facilities while the salon keeps the premises. A lease of part hands over more control than most salons intend.

Loaded hour

What an hour of employed time really costs: holiday accrual, employer NIC and pension on top of the rate. The demo £14.00 loads to £18.06, roughly 29 per cent above the headline.

Margin per hour

The only honest ranking of a menu: treatment margin divided by chair time. The demo £96 colour earns £13.87 an hour while the £52 cut earns £30.08, and the price list shows neither.

No-show

An empty slot the chair, stylist and diary already paid for. The demo salon loses £17,940 a year at 5 per cent of appointments; deposits deter more than they recover.

Patch test

The allergy test before colour and many treatments: a clinical safety step, an insurance condition, and a booking-flow question all at once. Skipping it can void the treatment-risk cover.

Renting in name only

An employee with a rent invoice: salon-set prices, salon-run diary, flexing rent. Reclassification brings back PAYE, NIC, holiday and penalties together.

Retail commission

The stylist's share of shelf sales, typically on the ex-VAT price. It works because recommendation sells, and it belongs inside the margin arithmetic: the demo bottle nets £4.63 after VAT, cost and a 10 per cent cut.

Rolling twelve months

The VAT registration test: any twelve consecutive months, checked monthly, never the tax year. A salon counts everything, so the line arrives earlier than expected.

Sole trader

The default legal shape for a chair renter: one person, one business, Self Assessment. The company question arrives later, priced on real profits.

Special treatments licence

The local-authority licence many councils require for treatments such as piercing, electrolysis and some aesthetics. Local law with local lists: one call to the council before the menu is printed.

Stock count

Colour and retail at cost, same day every week: opening plus purchases less closing is what really got used, and the variance against standard is the cupboard leak.

Substitution

Whether someone else could work the rented chair on the renter's behalf. A genuine right to substitute is strong self-employment evidence; personal-service-only points the other way.

Tax reserve

The renter's habit that beats January: a share of every week's takings moved to a separate account on arrival.

TheMusicLicence

The PPL PRS licence for music in the salon, background playlists included. One licence, renewable, priced by premises.

Treatment risk insurance

The cover for the industry's expensive claims: reactions, burns, infections. The policy should list every treatment on the menu, and renters carry their own.

Trivial benefits

The £50-a-time tax-free staff gifts, with conditions: not cash, not a reward for work, not in the contract. Alongside the £150 a head annual function exemption, VAT inclusive, cliff-edged.

Utilisation

Hours billed over hours available, per chair and per week: the salon's real capacity number, and the cheapest place to find growth.

UTR

The renter's unique taxpayer reference: ten digits that prove a registered business sits at the chair. Part of the paperwork check before the chair is offered.

VAT threshold

£90,000 of taxable turnover in any rolling twelve months, and a salon counts all of it: services, retail and chair rent. The demo studio holds £6,800 of headroom and checks monthly.

Voucher liability

The outstanding face value of sold, unredeemed vouchers: £7,380 in the demo drawer, counted at every year end, spent only by the naive.

Wage floors

The minimums from 1 April 2026: £12.71 at 21 plus, £10.85 at 18 to 20, £8.00 under 18 and for apprentices. Commission averages against them weekly; records keep six years.