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VTAXPER68800 | Particular trades: Hairdressing: Are the stylists employees of the salon?

From HM Revenue & Customs · VAT Taxable Person Manual

In order to answer this question, you will need to obtain two vital pieces of information:

  • the contract or agreement between the salon and the stylists; and

  • evidence of how the stylists are treated by HMRC for Direct Tax purposes.

You should only argue that the stylists are employees of the salon if there is clear documentary evidence to that effect:

  • an agreement which states specifically that a contract of employment exists, and/or

  • evidence that the stylists’ earnings are chargeable to tax as employment income.

If the stylists are employees, the guidelines agreed with the National Hairdressers Federation (VTAXPER69100) cannot apply; this is stated specifically at paragraph 1(a) of those guidelines.