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Save Our Salons: Calls for VAT cut to support hairdressers

hair salons VAT
Woman wearing red face mask getting fresh styling at a hairdresser shop; Shutterstock ID 1745431553; Purchase Order: My Weekly - March 6; Job: Health; 33647817-cba9-4568-9617-95bb12863e14

Hair salons in the north-east and Tayside have joined calls for the UK Government to temporarily reduce VAT in a bid to ensure businesses survive the pandemic.

The national Save Our Salons campaign, is calling on those who work in the beauty, spa or hair industry to urgently write to their local MP to push for the tax cut, in line with the reduction given to the hospitality sector.

It comes ahead of UK Chancellor Rishi Sunak delivering his next budget on March 3, which is due to be one the most closely watched in a generation.

Rebecca Carr, who owns Rebecca Carr Hair Salon in Kintore, Aberdeenshire, said a drop in VAT from 20% to 5% would “change your life”.

She added that “everybody is struggling” in the sector, with many facing loans they will need to pay back in the long term.

The business owner said: “It works out that around one third of every £1 that comes through our tills is being paid on tax so it’s a lot of money.

Rebecca Carr.

“The government has allowed this for hospitality but a lot of restaurants are still trading and, actually, they are still making money by providing food at home.

“They’re saying that 18% of salons know they’re definitely not going to survive the financial year. I’ve got a lot of friends who have salons and I think everybody is struggling.

“You’ve still got to pay PAYE and all your staff pensions so it’s not like anything stops, this has still got to be paid. It would change your life.”

Like many businesses, the salon owner has had to continually adapt to the Covid-19 crisis.

She expanded her business, The Rebecca Carr Hair Salon, the year before the first lockdown, in March, and extended into the next-door property to create a cafe and beauty salon.

Ms Carr said: “I’ve managed to increase jobs, which is good, but because of the social distancing in all salons, I had to put half of my salon next door so my staff could work normal hours.

“I’m so grateful that I had the business next door because it meant we could trade as normal rather than working seven days a week until 10pm at night.”

‘A shot in the arm for the industry’

Dundee salon owners, Kay McIntyre and husband John O’Rourke, have also thrown their support behind the national campaign.

Kay McIntyre, co-owner of McIntyres salons.

Ms McIntyre, who is co-owner of McIntyres salons, which employs 30 people, said VAT has been a “major handicap” for salons in dealing with the pandemic.

She added: “I would be behind this campaign.”

Mr O’Rourke said the hair industry needs a “shot in the arm” and that “thousands of salons aren’t going to make it”.

He adds that many of the smaller salons do not have the capacity to make a good profit with the requirement for social distancing cutting the number of customers they can see in any one day.

hair salons VAT

The business owner said: “VAT really impedes the ability to pay hairdressers more.

“If the VAT threshold could be reduced that would filter through to your staff and hopefully something like that would re-energise the whole economy a bit.

“We’re all just grinning and bearing it as long as we can but there is light at the end of the tunnel and we will hopefully get some kind of roadmap next week.”

‘Viable economic player’

A recent survey of 5,000 salons across the UK found 62% were unsure if their businesses would survive past the end of the financial year.

It was further reported that 18% were sure they would close.

The whole hair and beauty industry contributes £9.2 billion annually to Britain’s economy, employing almost 300,000 people within the UK.

Information provided by the British Beauty Council/ONS also shows that salons occupy nearly 45,000 business premises in the high street.

Those behind the campaign believe the industry has been largely overlooked as the “viable economic player” that it is, compared to other industries such as hospitality and the arts, which have seen extensive support packages tailored to their needs.

Gordon MP Richard Thomson, who has been contacted by Ms Carr as her local MP,  said the campaign has his “full support”.

Richard Thomson, Gordon MP, wants to see hair salons given a VAT cut.

He added: “Hair and beauty businesses are an important part of our high streets and although current restrictions are necessary, there’s no question that the sector has been hit harder than most by Covid.

“The Scottish Government has a comprehensive package of business support in place, including a further 12 months of business rates relief.

“However, a VAT reduction on top of this once businesses start to reopen could make a real difference and I’d urge the Chancellor to act on this when he presents his budget on March 3.”

‘We want to see thriving high streets’

A UK Government spokesman said: “We want to see thriving high streets, which is why we’ve spent tens of billions of pounds supporting shops, restaurants and cafes throughout the pandemic.

“And we’ve extended our furlough scheme through to April as well as providing £4.6 billion extra in grants earlier this year , so that people have certainty that help is in place.

“At the upcoming budget we’ll outline the next stages of our plan for support for businesses and families across the the UK.

“That has been our priority throughout the past year and it will be the priority for the year to come.”