Call to cut VAT for Welsh beauty businesses ‘to survive’

hairdressers covid

The beauty sector needs VAT cut to match the hospitality sector to survive winter, an MP has said.

Labour Swansea East MP Carolyn Harris said she fears many beauty businesses will go under by Christmas without more support.

One Cardiff hairdresser owner has said the new Job Support Scheme “wasn’t viable” for businesses like theirs.

The UK Treasury said their Winter Economy Plan will ensure support for the sector continues.

In July, a temporary cut to VAT from 20% to 5% was announced for the tourism and hospitality sector, which has been extended to 31 March 2021.

It applies to all food, non-alcoholic drinks, accommodation and tourist attractions across the UK.

But Ms Harris, chair of Parliament’s all-party group on beauty, aesthetics and wellbeing, has said the cut needs to be applied to the beauty sector.

“We really have to start thinking about this as a very serious contributor to the economy, a massive employer – they really need to have the support other sectors have had,” she said.

Ms Harris added that while Wales’ two week ‘firebreak’ lockdown would be “frustrating” for those in the sector, it was “the best means through which we can try to prevent a further, prolonged national lockdown over the winter months”.

Under Wales’ firebreak, beginning on Friday, close-contact services like hairdressers and beauty salons will be required to close until Monday, 9 November.

Helen Rouse, the director and owner of a salon in Cardiff, said the Treasury’s furlough scheme had been a “real help”, but added that its replacement – the Job Support Scheme – was “not viable”.

Her business employs 20 people, and two self-employed people, 19 of whom were eligible for the furlough scheme which ends on 31 October.

“I think the hairdressers are forgotten amongst all this,” she said.

“Pubs and restaurants had ‘eat out to help out’ back in August – there was nothing for us. No VAT break.”

The Welsh Government said every firm covered by small business rates relief would receive a £1,000 payment, and small and medium-sized retail, leisure and hospitality firms that have to close will get a one-off payment of up to £5,000 – with additional discretionary grants for struggling firms.

Ms Rouse said while the Welsh Government support for small businesses would be “helpful” it wouldn’t be enough to cover their 20 staff.

image captionMany salons invested in temperature check guns and plastic screens to keep customers safe
She said the best support they could have would be to stay open.

“We can’t survive the quieter months of January, February if we can’t maximise our October, November, December,” she said.

“Hairdressers are hygienic by nature, we’ve followed every rule, we’ve invested in all the Covid-secure PPE and screens and everything, and it just feels wrong to be shutting us down.”

‘It’s about survival’

Jayne Goodings, who owns Lemon Tree beauty salon in Cowbridge, Vale of Glamorgan, said the best she can hope for is to survive the lockdown as the Job Support Scheme would not help if they were closed.

“I was gutted for myself and lots of other small businesses,” she said.

“It’s been very, very tough. I’ve done my ranting, I’ve done my crying, but we’ve got to take it and get on with it.

“As long as I can be here when this is all over, that’s all I can hope for.”

A letter from Ms Harris to the prime minister in July said the sector contributed almost £8bn to the UK economy, and employed 370,000 people.

Since the summer, Ms Harris said the situation has become worse.

“I really worry that a lot of them will have gone under by Christmas at this rate,” she said.

“Unless we start making sure they are protected, they are going to have to think about redundancies, or closing up – especially the mobile therapists – who have only got themselves.

“Why not give them that support now to keep to them going, tide them over, so they’re still viable when this all ends and they’re able to reopen fully.”

A Treasury spokesperson said they keep all taxes under review and said: “We’ve supported the beauty sector from the start of the outbreak, protecting jobs through business rates holidays, our income support schemes, VAT deferrals and cash grants of up to £25,000.

“Our Winter Economy Plan will ensure this continues in the difficult months to come.”