Three Kings Tattoo London has been open since July 2020, after several years of figuring things out and frustrated with VAT laws in the UK, they switched to SplitSum in January 2024 for card payments. In just one calendar year they've avoided roughly £34,000 in potential tax liabilities and even more in time spent managing finances. Here’s how.

The Problem: Hidden Costs of Accepting Cards

You probably know this all too well at this point, the VAT system in the UK means any money coming into your business bank account is considered turnover and thus taxable. All traditional card processors will only deposit funds into one business bank account. This has created an environment where businesses with a model similar to a tattoo shop (where self-employed staff receive a large portion of the payments), either adopt sketchy methods to stay below the threshold, allow self-employed staff to accept their own payments and bill them later or move to an employee model adding additional costs on top of just VAT.

For Three Kings, none of these were a viable option. 

The Solution: Automated Payment Splitting with SplitSum

Along comes SplitSum, a platform that seamlessly splits each customer payment between the shop and its self-employed staff based on predefined settings. Using SplitSum, Three Kings was able to automatically separate artist's money from theirs, reducing their turnover to accurately reflect the amount they've actually taken in. Not only did this save the owner an immense amount of time in managing this money but it ensures that they could offer their clients multiple ways to pay knowing that when accepting card payments, the artists money would not effect the businesses turnover figure. That meant that in the calendar year from January 2024, Three Kings was able to stay below the VAT threshold, saving the business a potential £34,000 in VAT payments. 

It also means that if and when Three Kings reaches the threshold, the amount that will count towards VAT calculations will be only the percentage the business takes per transaction. If you want to see more about how Three Kings uses SplitSum check out our Case study here.

Why Your Business Needs SplitSum

If you run a tattoo shop, barber shop, hair salon, or beauty studio that works with independent contractors or self-employed staff, you’re likely facing the same challenges that Three Kings once did. Here’s why switching to SplitSum is a game-changer: You'll save time and money. It's a level of automation most standard card payment providers simply don't offer.

An Illustrative Example 

Here's a simplified example of how this can work. Say a self-employed staff member brings in £100k in turnover over a 12-month period. If all of that money passed through your business account, your turnover for VAT purposes could include the full £100k, potentially resulting in a £20k VAT bill.

If that same staff member receives 60% of the funds directly, and only your 40% share (£40k) counts toward your business turnover, your VAT liability could instead be closer to £8k, which is a meaningful difference.

This is a simplified example for illustration only, not a calculation of your own situation. Your actual VAT treatment depends on your specific turnover, contractor arrangements, and how your accountant advises you to structure things. We'd always recommend confirming the details with a qualified accountant before relying on any potential savings

Is this legal?

Yes — the underlying technology is straightforward and fully built on Stripe's regulated payment infrastructure, the same approach used by platforms like Uber to pay independent contractors. SplitSum simply automates splitting a payment at the point of sale, so each party receives their share directly.

What SplitSum doesn't do is make the self-employment decision for you. Whether your artists or staff are genuinely self-employed under HMRC's rules depends on your actual working relationship with them, not on which payment technology you use. That's a legal and accounting question, and it's worth confirming with your accountant before you rely on any VAT benefit. Once your contractor relationships are correctly set up, SplitSum just makes sure the money flows to the right place automatically.

Ready to Take Control of Card Payments in your business?

Three Kings Tattoo made the switch and hasn't looked back. By keeping contractor/practitioner payments separate from day one, they avoided an estimated £34,000 in VAT they'd otherwise have owed. All while cutting hours of admin every week. Every business's numbers will look different, but the same principle applies: only your actual income should count toward your turnover.

If you’re unsure whether SplitSum is right for you, we offer free demos to show you exactly how it works. We know changing the way you accept payments, especially for long established businesses, can feel daunting. Don't stress! You can try SplitSum for free for 14 days (credit card required for signup) and accept payments with your iPhone or Android via our mobile app. Not great with computers, we also offer full setup calls to walk you through the entire process. 

Book a free demo today and see how SplitSum can transform your business. Sign up now or schedule a call to get started!