Charge VAT on chair and room rent

These rules apply across the UK.

Chair and space rent for hairdressers

Renting facilities to a hairdresser or barber is a taxable supply by you as the salon owner, not an exempt letting of land. Washbasins, reception and waiting areas are an integral part of what you supply. The rent counts towards your VAT registration threshold. Once you are registered, add VAT to the rent and invoice each renter.

Rooms and areas for exclusive use

A separate room or defined area for exclusive use falls outside item 1(ma) when neither the owner nor a connected person provides services related to hairdressing. Item 1(ma) covers hairdressing only. For a beauty therapist or nail technician, the question is whether the arrangement is a licence to occupy land. That needs a defined area, an agreed period, payment, and the right to occupy as owner and exclude others, all four together. A licence to occupy land is exempt unless the owner has opted to tax. If land comes with other services as a single supply, the whole supply decides the VAT treatment.

Your VAT registration threshold

Standard-rated chair and space rent counts towards your threshold alongside your salon's other taxable takings. Rent that is exempt as a licence to occupy does not count, because taxable turnover leaves out exempt supplies. Each renter counts their own gross takings towards their own threshold, not yours.

Where to get help

Ask HMRC about the VAT treatment of an arrangement that does not fit the table, and keep the rental agreement that shows what you supply with the space.