She posted on Instagram. He heard from a friend. They called, made an appointment – and showed up with IDs, and sometimes hidden cameras. No, this is not the beginning of a detective series. This is the reality of more and more cosmetologists, laser hair removal therapists and beauty professionals who work from home, and suddenly find themselves at the center of a surprise audit by the Tax Authority.
If you think that a small job from home, with clients here and there and without “bothering anyone,” is of no interest to the tax authorities, think again. The trend is clear: the Tax Authority is increasing its supervision of small and “informal” businesses, those that operate in a side room, basement, or family living room.
Why cosmetologists and laser therapists?
Because this is a profitable, sought-after field – and saturated with small businesses that report partially, if at all. From the tax authority’s perspective, this is fertile ground for tax evasion. And the solution? Surprise audits. The kind that come in the middle of a treatment, ask intrusive questions, check customer logs, and ask to see “what’s in the till.”
What does such a review look like?
- Two or three visitors – sometimes in civilian clothes
- Documenting the business in action – sometimes as part of a previously conducted undercover audit
- Checking receipts, income books, appointment diaries, digital appointment calendar
- On-site investigation – including questions to customers, employees (if any), and the dealer himself
- Requirement to present a business certificate, receipts, tax certificates, sometimes even a lease or business license
The problem: “But I only work from home!”
This is exactly where the understanding begins of how thin the line between running a small business and running an illegal business is. From the perspective of the tax authority, once you collect payment, advertise services, and take care of customers – you are a business for all intents and purposes. It doesn’t matter if it’s a side job, if you “haven’t had time to open a case yet,” or if you do it “only for a few companies.”
5 Fatal Mistakes That Turn Criticism Into an Indictment
- Failure to record income – Even if it’s just a bank transfer or a bit. If there is no receipt – it’s a crime.
- Working without an income tax or VAT file – “I haven’t opened it yet” is not an answer. It’s tax evasion.
- Advertising on networks without revenue documentation – As far as the authorities are concerned, once you have published – you are an active business. And if there are no reports – the investigation begins.
- Using a residential address without a permit – It is not always legally permissible to operate a business from home.
- Non-cooperation during an audit – attempting to conceal information, conceal documents, or even respond with hostility – immediately worsens the situation.
Questions that cosmetologists ask – and are afraid to know the answers
- If I only work with my friends – is that considered a business?
Yes. If you collected money – that is business income. Even if you give a “membership discount.”
- Can an audit be carried out without prior notice?
Yes. And that’s exactly why it’s called a “surprise audit.”
- What if I’m just starting out?
The law does not take into account the age of the business. Even a week-old business must report.
- If I don’t report, it’s just a fine, right?
Not necessarily. You may be investigated with a warning, book disqualification, heavy fines, and even criminal charges.
- Can we get out of this safely?
It depends on the case – but only with professional and prompt legal assistance. Any delay only complicates the situation.
And what happens if the auditors decide that a serious flaw has been made?
- Retroactive tax charge (including VAT, income tax and national insurance)
- Heavy fines, sometimes in surprising amounts
- Disqualification of books – which results in loss of recognized expenses, tax increases, and more
- Opening criminal proceedings, even if it is the “first time”
- Denial of future rights (such as receiving grants or eligibility for exemptions)
How will you properly deal with a sudden criticism?
- Keep receipts for every transaction – even the smallest one.
- Keep an organized physical diary of customers, appointments, and payments.
- Open a file with the tax authorities from the moment you start collecting payment.
- Understand your obligations well – and don’t “accidentally” be out of date.
- And most importantly – consult with a lawyer and accountant who are familiar with the field.
In conclusion: It’s better to be beautiful – even in the eyes of the tax authority
Your beauty is your profession. But to stay in this world for a long time, you must understand that the state sees you as a business for all intents and purposes. And in Israel 2025, a business without proper management is a target for criticism, no matter how beautiful an eyebrow shaper you are. When it comes to taxes, even a gentle exfoliation won’t remove the problems – only proper management, professional legal advice, and truly smart conduct.
