Personal Care Services: Taxation
The question
To ask the Chancellor of the Exchequer, pursuant to the Answer of 7 May 2025 to Question 46841 on Personal Care Services: Licensing, how many hairdresser and barber businesses has HMRC investigated following evidence suggesting that they may have misclassified individuals for tax purposes in the last five years.
Answered by James Murray
HMRC is committed to ensuring the tax system operates fairly and efficiently, creating a level playing field for all compliant businesses.
Businesses providing personal care services, including hairdressers and barbers often operate using the ‘rent-a-chair’ business model. This unique but legitimate business model, unless applied correctly, can result in individuals being wrongly classed as self-employed for employment purposes.
HMRC are committed to tackling false self-employment and will investigate evidence that suggests businesses have misclassified individuals for tax purposes.
HMRC have worked with trade bodies for this sector to develop new educational material including a YouTube video and have published guidance on GOV.UK to better explain the employment status and tax implications of different business models, including the ‘rent-a-chair’ model. Details can be found at: https://youtu.be/5o3au6PyXG8 & https://www.gov.uk/guidance/check-employment-status-if-you-work-in-hair-and-beauty.
HMRC does not segment its data on businesses who have been investigated for misclassification of individuals for tax purposes by sector.
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