In relation to the latest “Save our Salons” or “Chop the VAT” campaign. I thought I would get behind the movement to get an inside view of why it will fail again. Does anyone else get a sense of doing the same thing and expecting a different result? Look what happened last year.
Government response in full below:
So the response is above for all to see. A giant NO to everyone involved in hair & beauty. No plans to help you because you have had enough help.
What are you going to do about it?
Option 1: Write to your local politician pleading for him to take your case to parliament.
Option 2: Swallow it and continue to work 4 months per year entirely for the governments benefit?
Option 3: Find a solution to economise your business so your tax liabilities are not so extortionate.
Option 4: Work off the grid.
I will be very interested to see what the consensus is around this issue. I believe only 10% of salons are VAT registered and therefore i expect only 50,000 signatures to ever appear on a petition which is woefully short of the 100,000 our Gov needs just to consider it for a debate in parliament (which is not guaranteed)
This whole movement fails to launch every time. I wonder why? I have an idea, it’s essentially because it does not have a direct affect on hair & beauty professionals. The indirect effect is debilitating for our sector but people cannot get passionate about indirect inconveniences.
Where does all of this tax go? I would hate to find out that it’s extracted from our grass roots in order to flow into the pockets of the centralised education system and worse still flow into filling up the balance sheets of the product companies that have bled the industry dry for decades.
I am getting involved and will be contacting my local mp to hear his take on the matter. I’ll report back here and via the podcast Salonomics.
Below is the email I sent my mp
Dear James Duddridge MP,
RE: SAVE OUR SALONS– KILL THE VAT FOR HAIR & BEAUTY
My name is Aaron Dorn. I own & operate Aaron Dorn Hair. I am located within your constituency, I am a freelance self employed hairdresser. I operate and teach hairdressing out of local salons including Stark in Chalkwell & Coronado SA on Canvey Island. I am also the founder of a new software company based out of Southend called GoSalon. Our entire business focus is based on helping hair & beauty professionals keep more of what they earn using software and technology.
I am urgently seeking your support to protect the immediate future and long-term recovery of our industry and the jobs it supports. Upon reopening salons require the immediate removal of VAT for hair & beauty businesses.
The hairdressing, beauty and holistic service industry:
- Contributes *£9.2bn annually to Britain’s economy, employing a workforce of 288,160 people as hair and beauty practitioners in salons and in a self-employed capacity within the UK. (*Source: British Beauty Council / ONS 2019)
- Represents *44,800 VAT and PAYE registered salons in the UK generating £5.4bn annually and employing 189,269 staff. Of this, £3.25bn turnover is generated by 12,300 VAT registered salons who in turn employ 94,686 staff. (*Source: ONS March 2020)
- Generates approximately one-third tax take for HMRC as a proportion of sales (as value is primarily added via the employed workforce)
- Enables flexible working patterns to support family life, increasing economic opportunities and entrepreneurship for women. *88.6% of this sector’s workforce are female. (*Source: Economic Impact Assessment – Hair and Barber Council)
- Provides numerous apprenticeship opportunities to help young people into work
- Underpins the ‘human’ high street; attracting footfall of millions of consumers per day to retail centres, provides a community hub, supports other local retail while promoting personal wellbeing and essential emotional support at times of crisis
In a recent survey of 5,000 salons, 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. (Source: National Hair and Beauty Federation – Survey 2nd Dec 2020). The consequent social poverty for those who work within them, will be a huge social casualty, with many having to fall back on benefits. Where do you think these newly unemployed workers take their skills? Off the grid and therefore contributing ZERO in tax returns for the recovery process. It’s really that simple. Do nothing and force people underground or do something and bring our industry in line with others.
For my own business, between April and December 2020, turnover has decreased by 50% year on year. While many of our overheads remain unchanged, yet with no income this is completely unsustainable.
Unlike other sectors who have received significant support the personal care sector has been largely overlooked, despite extended periods of closure and the inability for our services to be substituted or transition online.
The viability of our business is being massively challenged so the removal in VAT, once we are able to start trading again, will make a significant difference to the survival of our businesses and is the most cost-effective way of keeping our workforce employed.
As my local MP, I would welcome a meeting with you at the earliest opportunity to demonstrate my concerns. I look forward to hearing from you.