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With a new tax year now underway and the 2025 Spring Statement released, there’s no better time for aesthetic practitioners to get on top of their finances. While this year’s Statement didn’t bring any dramatic changes for small businesses in the aesthetics sector, there are still some key updates and smart steps you can take to keep your business financially healthy.
On 26 March, Chancellor Rachel Reeves delivered the Spring Statement, reflecting on the changes introduced in the Autumn Budget 2024 and outlining updates to economic forecasts. One bit of good news was that there were no further tax increases announced, which means clinics can plan their finances without the concern of further increased tax burdens.
Although the Spring Statement brought limited new measures, it built on key announcements made in the Autumn Budget 2024, many of which are especially relevant to small business owners in the aesthetics sector.
These include:
Here are our top tips to help you get ahead in 2025/26:
Personal tax thresholds remain frozen until 2028, meaning that the point at which you start paying higher taxes hasn’t shifted. However, with inflation in mind, more people may find themselves edging into a higher tax bracket without realising it.
Top tip: Regularly review your income and set aside tax savings throughout the year to avoid surprises. You can find full details on tax bands and thresholds on the Government’s website or see our table below for a quick overview.
VAT continues to be a tricky area for the aesthetics industry. If your business is approaching the £90,000 turnover threshold (rising from £85,000 from April 2024), you’ll need to register for VAT. The key thing is determining whether services are subject to VAT or can be classified as VAT-exempt medical procedures.
The two-part test that determines whether a service qualifies for VAT exemption:
You cannot claim plant and machinery allowances on things you lease (unless you have a hire purchase contract or long funding lease) – you must own them.
Top tip: Plan your capital investments strategically and speak to your accountant about what qualifies. You can also find out more about what you can claim on here.
Don’t miss out on allowances and deductions. From business mileage and home office use to training and professional memberships, there are a number of legitimate expenses you can claim to reduce your tax bill.
Top tip: Keep digital records (and receipts!) throughout the year to make tax returns easier and more accurate. Getting an accountant who is experienced in the aesthetics sector can help you navigate what is deductible and what’s not.
The Government is pressing ahead with its plan to shift all tax filing online under the Making Tax Digital (MTD) initiative.
As of the latest update in January 2024, new guidance has been released on how to report property income and profits – check the latest updates on GOV.UK.
Under MTD, individuals and businesses will need to use compatible software to submit quarterly tax returns to HMRC. This will apply to:
If your annual income is below £30,000, you won’t be required to use MTD yet, as HMRC is still reviewing how to adapt the system for smaller businesses.
For jointly owned property, such as in the case of married couples, each individual is assessed separately, meaning both can earn up to the income threshold before MTD applies.
Top tip: Although not mandatory just yet, you can sign up voluntarily. It’s a good idea to explore what’s involved and speak to a tax adviser, so you’re well-prepared and using the right software before MTD becomes compulsory.
While the Spring Statement didn’t introduce new tax rises, it did confirm that the Government aims to raise £1 billion through tougher enforcement on tax avoidance and evasion.
For small businesses, including aesthetic clinics, this means increased scrutiny, especially for those operating as sole traders or limited companies, where record-keeping and tax compliance can get complex.
Top tip: Make sure your accounts, receipts, and filings are up-to-date and accurate. Investing in professional bookkeeping or MTD-compliant accounting software could help you stay compliant and avoid unexpected HMRC penalties.
As your clinic grows, so should your business strategy. Depending on your profits, operating as a limited company rather than a sole trader could offer tax advantages, though it comes with more admin.
Top tip: Use the start of the new tax year as an opportunity to reassess and seek professional advice on the best structure for you.
Our updated Comprehensive guide to finance, tax and VAT in Aesthetics is packed with useful insights to help you stay compliant and confident as you grow your aesthetics business.
