VAT on renting a room within my salon?

[Sunny Days]

Hi

When I go VAT registered, will VAT be due on rental income I receive from beauticians who rent a room in my tanning salon please? There have set space within the salon (I've heard this makes a difference?) and are self-employed, separate to my business. I have 2 who rent a room and one on commission.

Many thanks
H

 

[Mr D]

Self employed?
So work the hours and days they choose, wear what they like, use their own tools and equipment, can send someone else to do the work for them on any given day? And you bill them for the rent.

 

[Sunny Days]

Self employed?
So work the hours and days they choose, wear what they like, use their own tools and equipment, can send someone else to do the work for them on any given day? And you bill them for the rent.

Yes, all that and they take their own payments, etc. I'm confident all the regulations are covered regarding s/e. And yes, they pay a fixed rent each week to me and we have a contract stating it. The one girl who pays commission rather than rent is happy to change to fixed rent too.

 

[Scalloway]

If all you are doing is renting them the room then it is VAT exempt. However if you provide other services such as handling bookings then you may need to charge VAT.

https://www.greenaccountancy.com/ta...en-subletting-part-of-your-business-premises/

 

[Sunny Days]

If all you are doing is renting them the room then it is VAT exempt. However if you provide other services such as handling bookings then you may need to charge VAT.

https://www.greenaccountancy.com/ta...en-subletting-part-of-your-business-premises/

Ah :/ We book people onto an online booking system if they phone the salon (but they book 80% of people themselves or people do it directly online). With regard to reception services, we invite customers to take a seat in the main part of the salon and wait for the beautician to come and get them. But we could sit clients in a separate area if necessary.

 

[Mr D]

Yes, all that and they take their own payments, etc. I'm confident all the regulations are covered regarding s/e. And yes, they pay a fixed rent each week to me and we have a contract stating it. The one girl who pays commission rather than rent is happy to change to fixed rent too.

Great, you'd be surprised the number who aren't as concerned about it.

 

[Sunny Days]

Great, you'd be surprised the number who aren't as concerned about it.

Yes I know... We've tweaked things over the years as we've learnt more and as I say, I'm confident we satisfy the s/e guidelines but now I'm not sure about the VAT side (we're due to go VAT registered next month so I need to get it right).

 

[Adam93]

VATA 1994 Sch 9 (1) (ma) catches hairdressers renting a chair (or similar) - standard rated.

VATA 1994 Sch 9 (17) elaborates on what the 'grant of facilities' means and (18) elaborates on what 'hairdressing' includes.

Without further information such as the structure of the business/company and the services provided, saying for certain would just be a stab in the dark.

 

[Sunny Days]

VATA 1994 Sch 9 (1) (ma) catches hairdressers renting a chair (or similar) - standard rated.

VATA 1994 Sch 9 (17) elaborates on what the 'grant of facilities' means and (18) elaborates on what 'hairdressing' includes.

Without further information such as the structure of the business/company and the services provided, saying for certain would just be a stab in the dark.

Thanks. Looking at this part : Paragraph (ma) does not apply to a grant of facilities which provides for the exclusive use, by the person to whom the grant is made, of a whole building, a whole floor, a separate room or a clearly defined area, unless the person making the grant or a person connected with that person provides or makes available (directly or indirectly) services related to hairdressing for use by the person to whom the grant is made.

(18)For the purposes of Note (17)—

(a)“services related to hairdressing” means the services of a hairdresser's assistant or cashier, the booking of appointments, the laundering of towels, the cleaning of the facilities subject to the grant, the making of refreshments and other similar services typically used in connection with hairdressing, but does not include the provision of utilities or the cleaning of shared areas in a building, and

(b)it does not matter if the services related to hairdressing are shared with other persons.

It's all a bit double dutch to me but I believe the only part we currently fall down on is that we take bookings for the renters which we can stop if necessary. Has anyone had any experience of this situation please?

 

[Energise Accounting]

This is the way i understand your situation. If you rent a chair to a hairdresser V.A.T should be charged.

If you rent out a room or a whole floor then you do not charge V.A.T provided you as the salon owner provide no other services.