Hairdressing salons - chair rentals: what are "chair rentals"?
“Chair rentals” include the provision (to hairdressers, barbers etc) of:
- a chair with certain rights of access or
- a clearly defined area such as a room or floor of a building (known as designated areas”)
together with “services related to hairdressing”.
Services related to hairdressing include:
- a hairdressers’ assistant or cashier
- the booking of appointments
- the laundering of towels
- the clearing of facilities
- the making of refreshments
They do not include the provision of utilities such as water, gas, and electricity or the cleaning of the shared areas of a building. However, this does not necessarily mean that the rental of a chair or a designed area which include the provision of utilities will be exempt - the liability of such will depend on the facts of the case.
When a hairdressing salon rents chair spaces to individual self-employed stylists, the salon’s supplies to the individual stylists will be taxable, even if the stylist has a licence to occupy the chair space. This is because there will be other elements of the salon’s supply that cannot be described as a better means to enjoy the chair space (e.g. use of washbasins, reception, waiting area for clients) - these are not ancillary to the licence to occupy, they are an integral part of the supply.