Hairdressers Chair Rental - Updated

Les Howard
VAT Consultant
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From 1 October 2012, any charge for ‘chair rental’ or similar at a hairdresser’s or beauty salon becomes standard rated for VAT.

For many years salon owners have allowed self-employed stylists to rent a chair, with a wash basin, and the surrounding area, arguing that it is a licence to occupy land, and therefore VAT-exempt. In many cases, this allowed the salon owner not to register for VAT. The HMRC Budget guidance is at

Since November 2007, HMRC have benefited from a helpful High Court decision ( The Court held that the salon owner in fact supplied to the stylists ‘all the facilities requisite for the carrying on by him or her of the business of a hairdresser.’ The supply was therefore standard rated. (The taxpayer owed over £80,000 of VAT, having registered for VAT 9 years late!)

From October, therefore, the ‘chair rental’ matter is settled. There remain two related issues:

  • Whether the income of the individual stylists is properly treated as the income of the salon; and
  • Whether the stylists should be treated as employees in any case.

It would be worth considering a simple written contract between the salon owners and the stylists, to outline the arrangements, and payments due under those arrangements.

I have been reading the draft legislation, which only refers to 'the grant of facilities within relevant premises to a person supplying hairdressing services.' Related activities, such as beauticians, seem not to be affected. Is this an opportunity or an anomaly?

(I have taken a bit of a break from posting, but back in action now! This post is the first of a series following up various current VAT issues, including Budget changes. Enjoy!)

About Les Howard


Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire

I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.


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10th Sep 2012 13:41

VAT on chair rentals

Solves one problem but like you said what about other services?

Have a client who rents a separate room from which beauty services are provided.

After an enquiry HM Revenue & Customs accepted this was not Vatable.

I would be interested to hear of experiences others have had concerning whether income from a sub-contractor in the salon is classed as income of the salon(ful legal agreement in place).

Just had someone come ot see me who has had a VAT inspection and been told they are Vatable as this sub-contract income takes them over the threshold!

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07th Oct 2012 19:38

Sub-contractor income

It may be argued that the income of the sub-contractor is the income of the salon, and VAT is due on the full amount. Strictly, the issue is the contractual arrangement between the parties. Is the sub-contractor in business on his/her own behalf, or acting on behalf of the salon. This is a problem area, and HMRC make periodic forays into this type of arrangement.

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