Habic calls for Government support to sustain industry after reopening
The Hair and Beauty Industry Confederation (Habic) has written to the Government to highlight the devastating impact of Covid-19 on the sector in Ireland.
As the sector gets closer to a reopening date, the organisation has outlined the key supports needed to ensure the future sustainability of the sector, as many businesses are challenged to remain as a viable going concern, and further challenged by a huge increase in black market trading.
According to Habic, the Covid-19 impact on trading and the many small business in the sector throughout Ireland has been very serious. Salons and operators have not been allowed to open yet in 2021, and in 2020 they were closed for 22 weeks in total, almost half of the year. It said the year-on-year comparison for 2020 against the previous year’s trading shows the stark impact of the coronavirus.
“While we recognise public health and safety is the priority, our sector has been disproportionately penalised,” said Margaret O’Rourke Doherty, CEO of Habic. “Since the outbreak of Covid-19, and from approximately 6.8 million services, there have only been seven outbreaks identified in the sector. We have outlined a number of measures that will have the dual impact; maintaining a viable sector, and at the same time protecting tax payers in the face of a burgeoning black market trade.
“Our members account for thousands of employees with a significant presence in every town and village in Ireland, who provide an essential service to the community. This is a crucial time for the sector and the communities who we provide our services to. It is essential that we are allowed to properly trade into the future.”
Last year economist Jim Power produced a report for Habic that highlighted the impact of the pandemic on the sector and the numerous measures required to ensure it is sustained into the future.
“Covid-19 has demonstrated the importance of hair and beauty services in Irish life, from a social, economic, and mental health perspective,” he said. “Following the closure of these businesses in March 2020, and the subsequent varying levels of restrictions, the financial impact on the operators has been very severe, but the impact on the national psyche has been equally severe.There are a number of key supports required to ensure the future sustainability of the hair and beauty sectors in Ireland.”
Key supports
The supports include making the 9% VAT rate permanent, and extending it to the beauty sector, as this would help the legitimate operators compete against the non-legitimate operators and undermine the black economy in beauty and hairdressing services.
Habic has also suggested the introduction of a ‘stay and spend’ scheme, which should only apply to registered legitimate businesses. It said that by giving a tax credit to customers, clients would be enticed back to the salons; this would provide support to struggling businesses seeking to rebuild, and it would help divert business away from non-legitimate operators who make no contribution to the Exchequer. The scheme should not be made available until eight weeks after the salons are allowed reopen, it stressed.
The industry body also wants the EWSS (Employer Wage Subsidy Scheme) to remain in place for the hair and beauty sector until at least the end of 2021, and possibly to the middle of 2022, along with extended reliefs for commercial rates, tax liabilities and bank interest costs.
As hair and beauty businesses reopen, the costs of doing so will be significant, Habic noted, with further investment required in PPE, rapid antigen testing, the high fixed and variable costs in running a business under conditions of serious restrictions, and staffing problems. It said the sector needs to be given a meaningful once-off grant payment to enable businesses to reopen in a sustainable way – this should be equivalent to 50% of commercial rates in 2019, subject to a minimum payment of €3,000.
