Post Pandemic Regulation Blues

Post Pandemic Regulation Blues

Anyone floating around social media lately may be aware of the current situation the hair and beauty industry is facing. We have been set a date of July 4th when hair salons and barbershops are able to resume trading. Associations are looking to press the powers that be for more direction surrounding the safety and prosperity of the industry. 

The fact some of these associations have been around for multiple decades and have yet to organise and illustrate a clear direction for an entire industry means either they’re complicit, incompetent or simply the message is not important enough? I’ve met most of these organisations and they are nice and kind people who have genuine love and respect for the industry. So what is it all about? The ‘R’ word is not the ‘Rona’ it’s Regulation. Not the most inspiring subject matter to engage the industry. But engage they have.

Disclosure: I am a state registered senior hairdresser, one of the co-founders of the men’s hair federation and a consultant for City & Guilds. I have skin in the game. I speak for myself as an individual and for myself only. 

What is the Regulation debate about? 

From what I gleaned from watching all of the Zoom meetings thus far “is that with more registered professionals we will be able to consult with the powers that be, for a fairer and more even playing field for all of the participants in the industry.”

Would having one voice give us more say in how to run our businesses? Would one voice enable us to campaign for the government to reduce the rate of TAX we pay?
If the point of government is to take care of the most vulnerable in society. Who and what would regulations on the hair and beauty industry protect?

Regulations for all of the best intentions inevitably makes joining an industry more difficult. It raises a barrier or level that somebody has to hurdle to trade. This can be seen as protectionism and removal of the ladder left behind before someone else can climb it. Therefore we need clarity to understand would regulation help or hinder the industry it is there to support?

The Hair and Barber Council. are one of the associations that banging the drum for a regulated industry. Alongside British Barber’s Association, British Master Barbers, City & Guilds and my previous colleagues at The MHFed.

They produced an interesting report that shows in England there are 40,861 businesses in the Hair and Beauty sector employing 282,374 people. We are a large industry and collectively we contribute massively to the UK economy in value measured in pounds but also contribute value measured in happiness. 

What numbers do the hair and barber council need to get into a dialogue with the government?

Would we need 52% of people registered? 

52% seems to be a number that enables movement in policy and parliament. 147,000 would be 52% (ish) but this number does not include the many self-employed hairdressers and beauty professionals. How many participants will we need to influence a positive outcome for the majority of an industry?

When they achieve a dialogue with the powers that be. What will the discussion be about safety, standards or tax contributions?

Maybe if the Hair and Barber angle was about excessive taxation of an industry rather than regulation it may inspire more businesses into the debate. 

During my time at the MHFed, one constant that would come up time and again in my discussions with Barbers and Hairdressers was regarding VAT. And how this has encouraged Salons and Barbershops to stay below the threshold. 

For every salon/shop that doesn’t pay it, there is a salon that does and is affected by the extra expenses and admin it creates. 

Rather than asking the minnows to pay more tax wouldn’t it be in the entire community interest to reduce tax?

I want to find a solution that would benefit the majority of the industry. 

If someone could articulate a fairer surface for all to play on – I.e Less TAX for everyone & Less Admin for everyone surely that is something more people would campaign for. 

52% registration of the industry could be secured and it would be something I could genuinely get behind. 

Remember the goal is DIALOGUE with the government about how our industry can grow. They want to see us contributing positively to society and local economy. The government don’t want to implement changes that can cause unemployment. They want to see us GROW.

Corona Virus is the black swan nobody in the industry could plan for. And with no evidence at this time as what affect this will have on our entire business. Shouldn’t we be cautious about what we do next?

Everything we do starts with the customers, If they disappear due to the virus then the future of our industry is in some choppy water.

Why our client visits could decline;

A) They aren’t willing to travel to you. 

B) They don’t want to be in a confined space with people they don’t know or travel in a confined space like a bus or a tube. 

C) They don’t want to leave a salon with wet hair. 

D) The whole process takes longer and the protocol is awkward.

E) It’s not a fun experience anymore.

Do you think a customer is going to pay more for that kind of service?

Will more regulation and enforced measures around corona push more people currently in hairdressing to self-employment? And what will the measures do to the volume of new young hairdressers coming into the sector?

Vidal tribute in 2018

Who will be mentoring our next generation? Who will be inspiring the next generation? Vidal Sassoon, Nicky Clarke, Lee Stafford, Eugene Souleiman or Beryl from the local college (no offence to the Beryl’s out there) I’ll never forget Mark Hayes on stage at the Sassoon tribute 2 years ago talking about a chat he had with Vidal. Mark was an aspiring young assistant at the time and he said “Once Vidal had spoken to the salon owner and the academy manager etc, He gathered all the assistants together.” and said “finally, i get to talk to the most important people in the room”

If things get harder for shop owners then it will put pressure on individuals that work within them to do more. Which could create a poisonous culture that could lead to the younger entrants going for a job at the supermarket instead and bypassing our industry altogether.

That would be a disaster for everyone in the industry, from product companies to administrators to educators to shop owners and the public.

What is the incentive for a salon to stay open? more costs, longer hours, smaller profit margins and fewer customers mean less profit. We do not know what the future holds. The only thing I am certain is that as a freelancer I earn more in my pocket for one mobile client than I can in a salon for two clients. 

I’ll show you. 

While working out of a salon as a self-employed person we are expected to pay VAT of 20% plus a further 50% commission to the owner (which a further 10-20% tax rate get cut out of that) and 20% income tax plus NI comes out of what is left for me.

Is it fair to you, To TAX somebody approximately 33+% on an income of 20k per year? No, I don’t think it is. What will happen – MORE people go freelance, more people avoid the system that supposed to protect the client/customer/stylist. 

Break it down

price

£60 haircut – (VAT 20%) £12 

(1.5% card fee) 90p

£48 – (50% commission to the salon owner) – £24 (10-20% Income TAX, after all, costs such as insurances, rates, product, energy costs which is approx £5)

£24 to me (minus travel, equipment, product, bank, insurances associations fees all costs – of what is left £20 % income tax 6% N.I = £5)

When I work in a salon I am left with £15 in my pocket out of a £60 transaction.

The tax generated is £22 (VAT £12 + income tax from salon owner + income tax from freelancer = £10) 

And yet many have this misconception that self-employed don’t pay any tax. 

As a freelancer, My client pays me £50 Client saves £10

I pay costs and fuel, products, wear insurance, bank fees, £6

income tax N.I on £44 = £11

I earn £33 per client. 

I need 3 clients a day for a lifestyle. (3 hour day)

Not 6 clients at £15 for survival. (6 hour day) in a salon.

I want more freedom to do with my time as I see fit. That came when I chose a lifestyle. Now I work hard for me. People work to enjoy life and not to pay more taxes. 

What do you think the best way forward is for our industry? Do you back regulation to protect your clients, to protect the industry standard or to protect your earning potential?

Aaron Dorn is a hairdresser with twenty years of experience and a background in finance and computers. He now educates and is a consultant for several companies within the hair and beauty industry.

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