Independent (Company) Beauty Therapist’s Contract (Own and Salon’s Clients)

In many businesses, particularly those associated with hair and beauty, chair rental agreements are popular. Under such arrangements, the hairdresser or therapist is independent (i.e. not an employee of the salon) and pays a fee to a salon in order to use their premises and equipment.

This Independent (Company) Beauty Therapist’s Contract (Own and Salon’s Clients) is designed for use where an independent beauty therapist’s personal service (or other) company (“PSC”) enters into an agreement with a salon for the PSC to use the equipment and premises of the salon. The beauty therapist provides their services to their clients through the PSC.

Under the terms of this agreement, the PSC makes fee payments to the salon in return for being permitted to use a salon chair and other equipment. This template provides alternative means of charging these fees: payment can be in the form of a standard fee or a percentage of the PSC’s takings or a combination of both of these elements.

As well as providing for the beauty therapist to serve their own clients, with the client paying the PSC direct, this template contract also allows the beauty therapist to provide services to the salon’s clients where the salon refers any of its own clients to the beauty therapist on any occasion. In this case, instead of paying the PSC direct, the client pays money to the salon and the salon then pays a percentage to the PSC.

This Independent (Company) Beauty Therapist’s Contract (Own and Salon’s Clients) is written in such a way that there is a clear distinction between the beauty therapist’s clients and the salon’s clients. In addition, the beauty therapist is prevented from soliciting the salon’s clients. The template favours the salon in that it does not also include any prohibition on the salon from soliciting the beauty therapist’s clients.

This template aims to help reduce the risk that in reality, the beauty therapist carrying out the work through their PSC is deemed to be an employee of the salon rather than a self-employed contractor.

Nevertheless, they might still be treated as an employee by HMRC, a tribunal, or any other body, and legislation (such as IR35, agency worker or other rules) might still apply in a way which adversely impacts the beauty therapist’s or their PSC’s legal, tax or NIC position. Whether that is so will depend not just on what is contained in this contract but also on all other circumstances. Those circumstances may include the way in which the contract is implemented, and all other arrangements between the PSC, the salon and the beauty therapist.

HMRC provides some guidance on its website about employment, sole traders, self-employment, IR35, and agency workers. Its decisions on these points are often based on a “balancing exercise” in which it gives weightings to various factors. However, neither the HMRC guidance nor case law are sufficiently precise to enable anyone to predict how in any particular case the “balancing exercise” would be carried out or what HMRC’s conclusion would be about that particular case. For that reason we recommend that, before you decide to use or adapt this template, you take professional advice in relation to your particular circumstances as to any impact on the PSC and the beauty therapist of employment law, tax, and NIC.

A carefully worded agreement ensuring the independence of the PSC is still a key starting point. Unlike an employee, the PSC is an independent contractor, it has its own clients, it is free to provide any suitably qualified person (rather than only the beauty therapist) to carry out any work, and it is free to determine when and how that work is completed..

This document is compliant with Data Protection Legislation.

This form of contract is suitable to use only where the beauty therapist is operating through a PSC but there is a version of this template (the Self Employed (Individual) Beauty Therapist’s Contract (Own and Salon’s Clients) ) where the beauty therapist, as a sole trader, enters into the agreement with the salon as a self-employed individual rather than through a PSC.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

This Independent (Company) Beauty Therapist’s Contract (Own and Salon’s Clients) contains the following clauses:

1. Definitions and Interpretation
2. Beauty Therapist’s Use of Salon’s Equipment and Resources
3. Beauty Therapy Services
4. Competition

5. Status of the Beauty Therapist etc
6. Consideration
7. Beauty Therapist’s and Salon’s Indemnities
8. Liability
9. Term and termination
10. Data Protection etc
11. Nature of the Agreement
12. Severance
13. Notices
14. Law and Jurisdiction

Schedules:

1. – Items, materials and services provided by Salon

2. Privacy Notices

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