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Legal advice for setting up a salon

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Top 10 Contributor
HJi Posted: Thu, Feb 23 2012 14:52

We received the following query via email:

Hi I wonder if you could help me. I'm thinking of converting my garage into a little salon for solely me to work in . I've contacted the council and they have said I just need to pay for consent of change of use and have building regs done . I need to find out what else I need to do for health and safety, insurances and self employment ? Want to make sure I do it properly and completely legally . Hope you can advise me !

Thank you xx

http://www.hji.co.uk
Top 10 Contributor
HJi replied on Thu, Feb 23 2012 14:55

Response from legal expert Julian Sampson below:

The opportunity to create and then run any form of business from home is very tempting and what you intend to do is a nice hybrid between the full salon and the mobile experiences. There are, however, a number of pitfalls: some more obvious then others and I am glad that you have already contacted the Council to run through the planning and building regulation implications. You should ensure these are in place before you commit to any capital expense: and with building regulations please do ensure you obtain a Completion Certificate from the local building inspector.

 

The key early jobs should be (and bear with me because, if we were to sit down properly there would probably be more!),

 

1.       your deeds:is there a restriction on your deeds preventing you from operating a business from the property? If there is then that is not necessarily the end but you should take advice on the likelihood of enforcement;

 

2.       insurance:whilst you should contact a specialist broker for your salon insurance requrements you should also have a conversation with your existing home insurer: by operating a business from the property you may invalidate your existing arrangements so if you had to claim on a personal matter (flood, say) then you could find your insurer refuse to give you cover

 

3.       mortgage: his will be an unpopular suggestion but bear in mind that running a business from your home will probably mean you are breaching the terms of your mortgage and as such the lender could call in the loan; they could also increase your rates. Notifying your lender is one of those areas that I can only recommend you do, but whether you do or don’t…….

 

3.       health&safety: whilst Building Control will also advise in broad terms on this area you should also ensure you have a specialist consultant attend your property and review the areas of concern such as storage of equipment, access and client safety

 

4.       employment: obviously anything you need to do here will depend on if you are taking on employees or have others working with or alongside you? You mention that it would just be you working there so this doesn’t seem to be of any particular concern.

 

5.       finances: if you are operating a business for the first time then it may pay to get some simple accountancy advice on registering with the Revenue for tax and NI contributions, whether you operate as a company or in your own name and whether you may need to be VAT registered in the future.

 

6.       leasing and equipment: you may look to finance some equipment purchases: whilst these may well come on a “take it or leave it” basis you should ensure you are given full copies of the finance agreements: sneakily you could try to ensure that they do not use the business to business exemption which could mean you wouldn’t get the normal consumer protections offered by the Consumer Credit Act but this is something of a long shot. If in doubt you should seek advice and always check the Total Charge for Credit and that the term of the arrangement is clear. You should also ask what happens to the equipment and whether you have a balloon payment to make at the end.

 

I hope this helps and that you will hopefully continue to use HJi and our own full legal service which has been designed specifically for salons and salon owners.

Kind regards

Julian Sampson

http://www.hji.co.uk
Top 150 Contributor

Julian is spot on with his reply, especially point 2 (insurance). Cover for working from home can be insured via a Freelance policy, this would cover your Public Liability and you could add stock/ equipment too.

Please speak to your insurance broker/ company who insures the house/ contents to let them know of the business activity.

Good luck

 

Gary Crowder
Account Director
Just Hair Insurance
www.just-hair-insurance.co.uk

 
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