When a hairdressing salon uses subcontractors within their salon, they should ensure the following so it is crystal clear that they are not classed as an employee as tax and national insurance implications are at stake:
- Maintenance of their own books and accounting records.
- Being responsible for their own tax affairs and health and safety procedures.
- Attending to their own insurance requirements which will include public liability insurance.
- Being capable of suffering loss as well as enjoying profits.
- Having complete freedom of charging their own price structure and opening times.
- Purchasing consumable products form from any source and sell any product range.
- Able to complete openly for clients form both inside and outside the salon.
- Being free to appoint a replacement as the needs arise.
- Being free of restriction about the sale and relocation of the business.
- Displaying a notice giving the name of the contractor and address to which documents can be served.
- Responding to claims brought about by third parties.
- Having their own stationary for business letters, written orders, invoice and receipts.
There is also the chance that HM Revenue & Customs may launch a tax investigation if the above points have not been considered and this is one of the area’s that they may be interested in and go for extra tax.