Accounting for tattoo artists and studios

Studio owners and renting artists

Many studios are run by an owner who also tattoos, with other artists renting a chair or a room. Each renting artist is a separate business: they book their own clients, set their own prices and pay the owner rent or a share of their takings.

That rent appears twice. For the owner it is income. For the artist it is an allowable expense.

Employed or self-employed?

The label on the agreement doesn’t decide it. HMRC looks at how the work is done: who sets the hours and prices, who brings the clients, who buys the kit, and whether the artist can lose money. An artist with a fixed rota, prices set by the studio and a guaranteed rate looks like an employee. If HMRC agrees, the owner can owe PAYE and National Insurance on past payments.

Put the arrangement in writing, make the day-to-day match it, and check each artist with HMRC’s Check Employment Status for Tax tool. See also HMRC’s guide to self-employment status.

Deposits

Most self-employed artists use the cash basis, which has been the default since April 2024. A deposit counts as income when you receive it, even if the session is in the next tax year. If you refund it, take the refund off your income. A non-refundable deposit kept after a no-show simply stays as income.

Keep a simple deposit list: taken, used against a session, refunded or kept. It makes the year end and any HMRC question straightforward.

Card, cash and booking-app payouts

Card readers and booking apps pay out after their fees. Turnover is what clients paid. Record the full amount and the fees as an expense. Cash goes on the books the same way as card, recorded daily. Guest-spot fees and flash or print sales are income too.

Tips you keep are part of your income, whether in cash or on the card machine.

Worked example

The categories don’t overlap: the £9,000 of deposits was not taken through the card reader or counted in the cash, so each receipt is counted once. On the cash basis, a deposit counts when it is received.

The card payouts are £22,064. Turnover is £39,800. That is under the £50,000 Making Tax Digital threshold for April 2026, but over the £30,000 threshold for April 2027 if the 2025–26 figure is the same.

Allowable expenses

• Chair or room rent
• Ink, needles, cartridges, grips and machines
• Gloves, barrier film, sterilisation and other PPE
• Aftercare products you sell or give to clients
• Design software and a tablet used for the business (split if it has personal use)
• Licence or registration fees, and insurance
• Travel, accommodation and table fees for guest spots and conventions
• Training that supports your existing business, such as updating the techniques you use or learning skills that help run it

Clothing is allowable only if it is a uniform or protective wear, such as aprons. Everyday clothes are not, even if you only wear them to work. Travel from home to your usual studio is commuting and not allowable. See Expenses if you’re self-employed.

VAT and chair or room rent

You must register for VAT when your taxable turnover goes over £90,000 in any rolling 12 months, or if you expect it to go over £90,000 in the next 30 days alone.

HMRC treats renting a chair or space in a salon together with shared facilities, such as reception, booking or cleaning, as a standard-rated supply of services, not a letting of property. Its guidance is written for hair and beauty salons, but the same test applies to a studio: a chair or station with shared facilities is normally standard-rated. A clearly separate room let on its own, with no services, can be exempt. A VAT-registered owner normally charges VAT on chair rent, and it counts towards the owner’s threshold.

Licensing

In England, tattooists and their premises register with the local council. In Greater London (except the City), it is a Special Treatments Licence that has to be renewed. Kent councils, for example, register tattooists and premises under local byelaws. In Wales, since 29 November 2024, each practitioner needs a special procedure licence and the premises an approval certificate, both from the local authority. The fees are a business expense.

Making Tax Digital

Making Tax Digital for Income Tax applies to sole traders with qualifying income over £50,000 from 6 April 2026, over £30,000 from April 2027 and over £20,000 from April 2028. It is measured on turnover before expenses. See MTD thresholds and start dates and quarterly updates and deadlines.

We can set you up in a week: MTD-ready in a week.

How we help

A fixed monthly fee, agreed up front. Your card, app and cash takings and deposits are reconciled each month, rent is recorded on the right side, expenses are categorised, and the quarterly updates and tax return are filed on time. For studios, we keep the VAT position and the artist agreements in order too. Run a barbershop as well? See accounting for barbers and barbershops.

About Andrew

Andrew Ramsell runs accounting and finance operations for owner-managed businesses, and builds the software that takes recurring work off their teams. He is based in Maidstone, works with tattoo artists and studio owners across the UK, and is an AAT-qualified accountant and Xero certified advisor.

Sources

GOV.UK and HMRC guidance, checked 10 October 2026; the licensing rules were rechecked on 27 October 2026, including the Welsh Government’s:

• Check employment status for tax (CEST)
• Employment status: self-employed and contractor
• Expanding the cash basis (default from 2024–25)
• VAT Notice 742: land and property
• VAT Land and Property Manual: supplies that are not letting (VATLP05900)
• VAT registration: when to register
• Expenses if you’re self-employed
• Tattoo, piercing and electrolysis licence (GOV.UK)
• New licensing rules for special procedures (Welsh Government)
• Work out your qualifying income for MTD