Shots were fired recently in the First Tier Tribunal case of Errol Willy Salons Ltd (2022) TC 08370. The company operated a hairdressing salon and had let two rooms on the first floor of the salon building to beauticians who equipped their rooms themselves, set their own pricing and opening hours and, even though they had access to use of the salon’s receptionist services, rarely used them. Their rent was calculated as a percentage of their takings.
HMRC took the view that the services provided by Errol Willy Salons to the beauticians amounted to the provision of facilities where the room occupation was only a minor part of the supply, so the ‘rent’ was for a standard rated supply or services. Also, that the ‘economic and social reality’ was that the beauticians were provided with a standard rated licence to trade from the premises.
Source: centurionvat.com
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