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Sunbed business operating from inside hair salon -

vat and income tax repercussions

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Client wants to set up a sunbeds business in a separate area inside a hair salon that is rented by another person. How will this be seen by HMRC for VAT (HMRC treats chair renting as taxable supply/ not sure if item 1 group 1 shedule 9 vata 1994 has been modified to that effect yet) and income tax (disguised employee?). the sunbed business will share waiting area, washbasins but have separate staff, records, till. Thanks. 

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By Les Howard
26th Jun 2017 09:08

Chair rental became taxable, and the legislation changed, from 1 Oct 2012.

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By Ajtms
30th Jun 2017 11:54

I am not a VAT expert, but there seems to be strong similarities here to the First Tier Tribunal case of Graham & Christine Belcher (TC5891) where the married hairdressers won their case against HMRC in proving that their individual hairdressing businesses run on the same premises were separate businesses for VAT registration even though they always prepared a partnership income tax return together. Take a read of the Taxation Magazine article in the 22 June 2017 issue by Neil Warren headed "surprise decision"

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