We infer from the evidence that exclusive use of the area floor spaces was not part of the arrangement. The area-floor space of the stylist was not defined in the agreement that we saw. Nor were the dimensions of such space specified. The only thing that could possibly be described as exclusive use was the chair allocated to the particular stylist. But even that was available to [the salon] and to the other stylists when the particular stylist was absent.

What the stylist wants is a chair and mirrors, lighting, heating and water, use of the reception facilities and of stock in the dispensary and a laundered towel service. The Agreement has sought artificially to split the already artificial floor space licence from the real service of salon facilities.The total amount payable was a package.

In short the Court believed that Michael Jane was looking to create an artificial paper trail and use the contract to exempt part of their charges from VAT whereas the practice was very different. The problem that befalls salons is that, by their very nature, there has to be fluidity in the way that stylists work and use common facilities. It is this practice that the Revenue will review.

I should say at this stage that this does not mean the death of chair rental. What is simply means is that the VAT man will expect to recover VAT charges on any invoices rendered for the use of facilities. Chair rental was never intended to be a neat way to avoid tax but a neat way of filling a salon and satisfying client needs.

My view is that the Michael Jane case is fairly clear. However, the case was appealed so that a more detailed review and precedent could be set and in May 2008 (reported on 30 October 2008) the High Court itself took the question on board following an appeal from a second case at the VAT Tribunal in June 2007. You will notice that June 2007 was not a good month. This case concerned The Studio Hair Company alongside Michael Jane.