Nail Technician Chair Rental (Service Company) Agreement

Nail Technician Chair Rental (Service Company) Agreement

EMP.SELF.04B

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

This Nail Technician Chair Rental (Service Company) Agreement is designed for use by a salon whereby it and an independent nail technician’s personal service company enter into an agreement whereby the salon allows him/her to use the equipment and premises of the salon.

This document aims to help reduce the risk that in reality, the technician carrying out the work through his/her personal service company is deemed to be an employee rather than a self-employed contractor.

Nevertheless, he might still be treated by HMRC, a tribunal, or any other body as an employee, and legislation (such as IR35, or other rules) might still apply in a way which impacts the technician’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 technician.

HMRC provides some guidance on its website about employment, self-employment, and IR35. 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 and the technician take professional advice in relation to the particular circumstances as to any impact on the service company and the technician of employment law, tax, and NIC.

A carefully worded contract 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 technician) 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 clients in addition to those at the salon.

Under the terms of this agreement payment to the salon takes the form of a standard fee plus a percentage of the technician’s service company’s takings. Optional clauses in this contract also allow the technician’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 technician’s service company.

The agreement is written in such a way that there is a clear distinction between the technician’s service company’s clients and the salon’s clients. In addition, the technician’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 template is suitable to use only where the technician is operating through a personal service company but we have also included, in the IR35 and Self-employed subfolder another version of this contract, the Self-employed Nail Technician (Chair Rental) Agreement, where the technician enters into the agreement with the salon as a self-employed individual rather than through a personal service company.

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 Nail Technician Chair Rental (Service Company) Agreement contains the following clauses:

1. Definitions and Interpretation

2. The Technician’s Services

3. Nature of the Services

4. Status of the Technician

5. Consideration

6. Technician’s Indemnity

7. Salon’s Indemnity

8. Liability

9. Termination

10. Nature of the Agreement

11. Severance

12. Notices

13. Alternative Dispute Resolution

14. Law and Jurisdiction

This document is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes. 

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