From 1 October 2012 the rules surrounding the tax liability of chair rentals in hairdressing salons will be updated as HMRC moves to ensure salons and barbers correctly identify the rental as being exempt or standard rated for VAT purposes.
Chair rentals can broadly be categorised as providing a chair with rights of access, or a clearly defined area, to a hairdresser, barber, or stylist alongside “services related to hairdressing”. Such an area may take the form of a separate room within a salon, or be something as wide ranging as a floor of a building.
The notion of services being related to hairdressing has caused much of the confusion over when a supply is standard rated or exempt.
Services that are related, and it is irrespective if these are shared with other peop...
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.