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 saved 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 artists based on settings only the owner can control. 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. No other card payment provider can offer that!

Let's do a little math. Say you have a self-employed staff member who brings in £100k in turnover in a 12 month period, if you take in all that money you'd owe the government £20k in VAT. If your self-employed staff receives 60% of the funds that means you'd be left over with £20k after paying your VAT bill. However, if you were to use SplitSum and your payments were split so that your self-employed staff received their 60% automatically, your turnover would reduce by £60k making your turnover amount reflect accurately what you take in: £40k. So in stead of a £20k VAT bill you'd get only £8k VAT bill. That's £12k in VAT savings in one year. 

Want to see how much your business can save? Check out our VAT Savings Calculator!

Is this legal?

Absolutely! The powerful Stripe Payment Service Provider and their API makes this possible! When you use SplitSum you essentially are getting your own custom platform with Stripe so that your self-employed staff are set up as businesses under your umbrella. Each transaction is split and the self-employed staff pay a 'fee' to your business (which would be your agreed percentage) for the use of the platform. Its essentially the equivalent of each self-employed staff member having their own card reader and sending you your cut - except you can use one card reader, one interface and all payments are split instantly and automatically. 

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 Android phone (iPhone coming soon) via our FREE app. Not great with computers, we also offer FREE setup calls to walk you through the entire process. 

Ready to Take Control of Card Payments in your business?

Three Kings Tattoo made the switch and hasn’t looked back. They’ve saved tens of thousands of pounds while simplifying their finances. You can too.

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