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HMRC internal manual

VAT Land and Property

HM Revenue & Customs
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Hairdressing salons - chair rentals: case laws prior to the change in legislation

There have been many court decisions that support HMRC’s view that chair rentals by hairdressing salons are standard rated supplies. In 2007, the High Court commented that the Tribunal’s reasoning in Mallinson & Woodbridge provided “a compelling analysis showing why in all chair letting hairdressers’ arrangements… the supply cannot properly be categorised as the letting of immovable property” [Denyer, CH/2007/APP/0361, paragraph 44].

In Christopher James Denyer (CH/2007/APP/0361), the High Court found that chair rentals were standard rated.

The taxpayer owned a hairdressing salon in which he granted self employed stylists an area from which to work together with use of wash basins, laundry service, access to consumables and to some extent a waiting area for customers (there was no provision of a receptionist or a till and no shared use of juniors). While accepting that the supply of a space from which to trade, albeit just sufficient for a chair and the area immediately round it, was a supply of land, the High Court considered that the Tribunal had erred when it ruled that this was the predominant feature of the supply. The Court commented:

‘Looked at in the round, the package in this case was the supply to the stylist of all the facilities requisite for the carrying on by him or her of the business of a hairdresser, including importantly the provision of an exclusive chair and allocated area, but including significantly also the facilities shared in common within the salon as a whole.’

In Andrew Holland & Vigdor Ltd (CH/2007/APP/0663 & 0664). the circumstances were much the same as in Denyer, above. In each case the salon made available a specific area for the use of each self employed stylist together with a bundle of facilities and services - the precise nature being slightly different between the two. The Court commented that:

“viewing the transaction as a whole, what the taxpayer supplies is best understood not as simply the making available of property but as the provision of a service capable of being categorised in a different way.”

HMRC applies similar approach to nail studios and tattoo parlours.