HMRC issues new tax guidance for beauty & hair professionals

If you rent a chair or space within an existing beauty or hair salon, HM Revenue and Customs (HMRC) has issued new guidance to help confirm your employment status for tax purposes.

The guidance is aimed at professionals who pay an agreed fee or percentage of their income to use a chair or space within a salon and includes how to use HMRC's Check Employment Status for Tax (CEST) tool. 

It highlights examples of common scenarios that indicate whether an individual is considered employed (such as having set working hours determined by the salon) or self-employed (for example, setting their own prices and maintaining their own client list).

As well as outlining information about VAT registration and the importance of written agreements when renting salon space, a video within the guidance explains that clarifying employment status isn't a choice and outlines different tax obligations based on your status.

Commenting, Kelvin Shorte, Deputy Director of Taskforces & Specialist Compliance at HMRC, says:

"We understand the hair and beauty industry operates with various working arrangements, and it's vital that both salon owners and professionals get their tax status right. This new guidance responds directly to requests from the industry for clearer, sector-specific information.

"Whether you're a salon owner with staff or someone who rents out chairs in your premises, this guidance will help you understand your obligations, so you can get your tax right first time."

You can read the guidance in full here.