How do self-employed mobile massage therapists do accounts and tax returns?
This article is a simple guide for individuals who are, or want to be, a self-employed mobile massage therapist. It is a rough guide and I advise you check anything here with an accountant or bookkeeper for accuracy and in case anything has changed with regards to HMRC since writing this. The advice I have written here, is based on my personal experience in running businesses and is primarily for purely mobile therapists but some if this can be applied if you also operate from a room or cabin at your home address. I am not a tax expert or qualified in accounting, I reiterate this is just a guide, with a few links to help you get started and over the tax stumbling block to setting up your own business.
Be your own boss!
So, you have finished training, got your massage qualification and insurance and are ready to start seeing clients. However, one of the biggest stumbling blocks for therapists to start their own mobile massage business, is how to do their accounts and self-assessment tax returns. This very issue is what stops a lot of therapists from branching out on their own, earning what they deserve.
Don’t let the fear of accounting and tax returns stop you.
Simple accounts and self-assessment tax returns are really very easy. Follow these simple steps to setting up.
- Register as self-employed with HMRC. For simplicity I use the same dates for the start and finish of my business as the tax year – 6th April – 5th Once registered the HMRC will send you useful tips and advice if you want them and reminders of when to submit your return.
- To start off with you can set up a simple spreadsheet to record your business income and expenses. Don’t be put off by the term spreadsheet, you don’t need to be an Excel wizz to use a simple spreadsheet. You don’t even need to use Excel, as Google Sheets is free and just as easy. See this quick video on how to do this.
The best way to keep a track of income, clients and bookings.
The most simple and effective way to take client bookings in a way that avoids double booking with personal appointments and is easy to keep a record of income, is to use Google Calendar. It is secure because it is password protected and you will meet GDPR requirements. Google calendar is simple to use and syncs across all your devices. This is an easy way to keep a detailed record of income and allows you to just tot up the income at the end of the month and then just add one entry to your simple spreadsheet. See my short video on how to use Google Calendar.
When I first started, I had a posh appointments book and it felt very professional until I double booked clients with personal appointments such as doctors etc. An appointments book, or other diary is also very bulky to carry around, yet we always have our phones on us. So using Google calendar on your phone makes it easy to rebook clients before you leave their house, with confidence you are not double booking yourself.
Benefits of using Google calendar.
- Use different colours to keep business appointments separate to personal.
- Tot up income each week or month to enter it into your spreadsheet.
- Google calendar will save all your appointments so it is a record of your individual transactions for income.
- You won’t double book a client booking with a personal event such as a dentist appointment or holiday.
- Google calendar syncs across all your devices
- If you want to manage your personal and business appointments on one calendar set up a personal Google account if you do not already have one or use one you have already set up.
- You don’t need to create a gmail email account – you can use your current email address
Do I need a business bank account?
This a very good question, when you start out you want to just get going and to do everything as easy as possible with the least expense – but you also want to do everything correctly. This article by Martin Lewis – the Moneysaving Expert explains everything you need to know about business bank accounts vs personal. https://www.moneysavingexpert.com/banking/business-bank-account/
Personally – I still use my own bank account and do not have a business account but getting a business bank account is something I will do at some point.
If you are not comfortable doing your own spreadsheet, what can you do?
There are some great small business accounting software out there. All will cost you a small subscription and work more effectively if you have a business bank account. So before choosing one, look into the different bank accounts available and which accounting software packages they work with. Then choose which is best for you. See the Martin Lewis article above, it has some great advice on this.
Here is a list of the most popular small business accounting software available.
Accounting software
Freeagent https://www.freeagent.com/
Quickbooks https://quickbooks.intuit.com/uk/
What expenses should I be including?
When you start your own mobile massage business it is important to make sure you charge your business all the relevant expenses.
- Mileage. Most therapists will use their personal car and business mileage is easy to calculate. You can just keep a small notebook in your car and record your starting mileage and tot up the number of miles you have done for business at the end of the day. Or you can use an app like MileIQ https://mileiq.com/uk. Then to calculate your mileage expense you just need to multiply your mileage by the allowance set by HMRC which at the time of writing is 45p per mile. Please check this on the Gov.UK website before submitting your expenses as this may change. HMRC allows you to claim a set amount per mile which takes into consideration depreciation of your car, not just the fuel expense. I would advise against buying a car just for your mobile massage business: this will involve more accounting costs and probably require an accountant to work out your capital assets and depreciation etc.
- Laundry. If you use a launderette then keep the receipts and record the expense onto your spreadsheet or your accounting software. If you use your own washing machine – work out a rough estimate of the electricity used per wash using your smart meter. For the water and sewage expense you can add on a couple of pounds per wash or factor in part of your annual water and sewage bill at the end of the year to account for this.
- Phone. Some therapists account for the total mobile phone expense, some decide to factor a certain amount of the annual bill depending on how much they use for their business. You must do which you consider most suits your business.
- Broadband and landline – are you using your computer at home for your social media and website etc.? You can claim for some of this cost if it is vital for your business.
- Home heating and electric – are you spending time at home doing office and admin work? If so, you can claim for some of your heating and electric expense against your business. It depends on how much you think you are working from home to decide how much you claim here. It is up to you.
- Website expenses.
- Cost of your products and equipment.
- Insurance
- Business car insurance.
This is not an exhaustive list – there may be some things that I have forgotten. However, if you use the rule that if you need to spend money on something to run your business and you can justify the expense, then you can claim it. HMRC self-assessment tax returns do not ask you to itemise every single item, they just want a total figure, but if you have a spreadsheet or accounting software that can show the individual expenses and you can show these if asked, then you will not have any problems.
Do I need to be a limited company?
No. Being a limited company is an unnecessary expense and admin nightmare. Being limited protects you from liabilities like rent, utilities bills etc should your business not succeed. It makes your business separate from you as an individual and therefore you cannot be held personally responsible for problems with the business. To become limited you have to register with Companies House and submit company accounts etc. You will most likely need an accountant to do this for you, which will also cost you.
If you are a purely mobile massage therapist and are using your own personal car – you do not have any liabilities. Should you stop trading you will not have any expenses that will make you lose your home or make you go bankrupt, so you do not have to be a limited company.
How do I fill out my self-assessment tax return?
I have found this great article that tells you all you need to know. https://www.unbiased.co.uk/life/small-business/self-assessment-tips
About the author.
I hope this article has helped. I am writing from my own experience as a shop owner, a limited company owner in my past life and now as a mobile massage therapist since 2015.
I am not an expert and write this just as guide – if you are unsure of anything to do with your business, please make sure you check with a qualified professional. Tax and accounting is your individual responsibility and I cannot be held responsible for your tax affairs.