IR35 Service agreements can still be used by Salon Owners and Nail Technicians, however, everyone must ensure that they have a full understanding of the rules and regulations, which is where we, the Salon Managers Academy are trying to help.
In time gone by a Nail Technician would pay the salon owner a fixed weekly or monthly fee to rent a room in the salon and then bring their own clients into the salon and charge them for their services. The government in their infinite wisdom decided to clamp down on this because much of the money changing hands was not being reported to the HMRC. So those Salon Owners who wish to rent tables to Nail Technicians wanting to work independently it is still possible providing you follow the rules. Here is how to proceed.
SALON PROFESSIONAL
In the first instance the Nail Technician must register as a company with company’s house, therefore creating a service company.
SALON OWNER.
The salon owner must decide if they want the Nail Technician to carry out services on their own clients only or a combination of their own clients and the salon clients. This is important because there are distinct and separate contracts for each of those situations. The salon owner must also decide if they will charge the Nail Technician a fixed rental fee or a straight percentage of earnings or a combination of both.
A fixed rate may be better if the Salon Owner selects that the renter will service their own clients only – and – if the salon owner selects that the renter will work with both their own clients and salon clients therefore charging a fixed rate rental and possibly pay a percentage of the salon client charge to the renter when the renter works with salon clients.
You should consult with a certified accountant regarding income tax, VAT and accounting with the HMRC.
