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IR35 Company Agreements

Hair & Beauty Salon Chair Rental (Company)

Popular in the hair and beauty industry, Salon Chair Rental Agreements (Company) allow beauty professionals to enjoy the benefits of working in a salon and independence without the inflexibility of being an employee of the salon.

A beauty professional – hairdresser, beauty therapist, or nail care technician – provides their services under these templates agreements through a personal service or other intermediary company (“PSC”). The PSC (not the individual freelancer) contracts with the salon. In each case the PSC contracts with the salon for the right to operate the PSCs beauty business in the salon’s premises using a chair and other equipment made available to it by the salon. The individual beauty professional, on behalf of the PSC, provides services to clients.

There are two alternative versions of the agreement for each type of beauty service.

Firstly, there is a version under which the PSC independently provides services direct to its own clients. Secondly, there is version where, in addition to providing services direct to the PSC’s own clients, it can also provide its services (as a subcontractor to the salon) to any existing client of the salon that the salon refers to the PSC on any occasion.

Where the PSC deals with its own clients, it is paid direct by those clients, and where the PSC deals with a salon client referred to it by the salon, the client pays the salon and the PSC is then paid by the salon.

Where a PSC does not contract with the salon in this way but, instead, the professional directly personally contracts with the salon, a form of agreement in the accompanying Hair & Beauty Salon Chair Rental Agreements should be used instead.

Each of the templates below seek to minimise the risk that IR35, agency worker, employment law, or other legislation will have an adverse impact on the individual professional and/or their PSC. They all take into account recent legal and industry developments, including case law, employment law, IR35 tax rules, and VAT law. 

As explained in the information page accompanying each form of contract , use of these (or any other) particular forms of contract can only seek to reduce but cannot actually remove this risk. Professional advice should therefore be sought, and that advice needs to take account not only of the content of the proposed document but also all of the circumstances and arrangements relating to the work, the individual, the PSC and the salon.

Hair & Beauty Salon Chair Rental (Company) is part of Business . Just £38.50 + VAT provides unlimited downloads from Business for 1 year.

Frequently Asked Questions

I run a salon and want a stylist to work from a chair through their own company. Which agreement? +
Use these Salon Chair Rental Agreements (Company) where the beauty professional, a hairdresser, beauty therapist or nail technician, provides services through a personal service or other intermediary company, and that company contracts with your salon for the use of a chair and equipment. If the professional instead contracts with you personally as a sole trader, use the Hair and Beauty Salon Chair Rental Agreements in the Self Employment and Freelancer Contracts group.
Does a chair rental agreement stop the stylist being treated as my employee or worker? +
It reduces the risk but cannot remove it. If the reality is that you control the professional's hours, prices and methods, an employment or worker relationship can still be found despite a rental label, and the off-payroll and agency rules may be relevant. These templates are designed to support a genuine independent business using your facilities, but the working arrangement decides status, so take advice if the picture is mixed.
What is the difference between the two versions of the agreement? +
Both let the professional's company run its own beauty business from a chair in your salon. Under the first version the company deals only with its own clients and is paid by them directly. Under the second the company can also serve clients that your salon refers to it, acting as your subcontractor, in which case the client pays the salon and the salon then pays the company. Choose the version that matches how clients and payments flow.
Do I have to charge VAT on the chair rental? +
If your salon is VAT registered, yes in most cases. HMRC treats the rental of a chair to a stylist as a standard rated supply, not an exempt licence to occupy land, because it normally comes with other facilities such as washbasins, reception and a waiting area. It could be exempt only if you provide a clearly separate area and no other services. You must register for VAT once your taxable turnover passes £90,000.
If someone rents a chair through their company, who deals with their own tax, insurance and clients? +
The professional's company runs its own business, so it is generally responsible for its own tax and National Insurance, its own insurance such as treatment and public liability cover and its relationship with its own clients. That independence is part of what supports the arrangement being a genuine rental rather than employment. The agreement should set out who is responsible for what, so both sides are clear from the start.
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