Hairdresser Chair Rental (Service Company) Agreement
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 Hairdresser Chair Rental (Service Company) Agreement is designed for
use by an independent hairdresser’s personal service company which is to
enter into an agreement with a salon in order for him/her to use the
equipment and premises of the salon.
This template aims to help reduce the risk that in reality, the hairdresser
carrying out the work through his/her personal service company is deemed to
be an employee of the Salon rather than a self-employed contractor.
Nevertheless, he 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 hairdresser’s
or his/her company’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 company,
the salon and the hairdresser.
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
service company and the hairdresser of employment law, tax, and NIC.
A carefully worded agreement ensuring the independence of the personal
service company is still a key starting point. Unlike an employee, the
company is an independent contractor which is free to provide any suitably
qualified person (rather than only the hairdresser) to carry out the work,
it is free to determine when and how work is completed (subject of course
to the salon’s requirements), and it is free to take on other clients.
Under the terms of this agreement payment to the salon takes the form of a
standard fee plus a percentage of the hairdresser’s service company’s
takings. Optional clauses in this contract also allow the hairdresser’s
service company to provide services to the salon’s own clients. In this
case, the clients would pay money directly to the salon with the salon then
paying a percentage to the hairdresser’s service company.
The agreement is written in such a way that there is a clear distinction
between the hairdresser’s service company’s clients and the salon’s
clients. In addition, the hairdresser’s service company is prevented from
soliciting the salon’s clients. Optional elements within the contract allow
this provision to be ‘softened’ or ‘toughened’ as appropriate.
This contract is suitable to use only where the hairdresser is operating
through a personal service company but we have also included in the
Self-Employed Agreements subfolder a version of this template (the Self
Employed Hairdresser's (Chair Rental) Contract) where the hairdresser, as a
sole trader, enters into the agreement with the salon as a self-employed
individual rather than through a personal service company.
The data protection provisions in this document have been updated in line with the UK GDPR.
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 Hairdresser Chair Rental (Service Company) Agreement contains the
1. Definitions and Interpretation
2. The Hairdresser’s Services
3. Nature of the Services
4. Status of the Hairdresser
6. Hairdresser’s Indemnity
7. Salon’s Indemnity
10. Data Protection
12. Nature of the Agreement
15. Alternative Dispute Resolution
16. Law and Jurisdiction
Schedule: Each Party's Privacy Notice
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