Hairdressers' 9% VAT rate extended until September

The Government has announced a final extension of the 9% reduced VAT rate for the hospitality sector, which includes hairdressers, for a further six months, as part of its measures to deal with cost-of-living increases.

The reduced VAT rate will return to the standard 13.5% rate from 1 September.

The announcement was welcomed by industry bodies, including the Irish Hairdressers Federation (IHF), which has been lobbying for the rentention of the 9% rate.

“We are delighted with the announcement that the Government has announced the extension of the 9% VAT rate for a further six months,” it said. “Our campaigning doesn’t stop now though, and we will continually lobby for the retention of the lower VAT rate.”

The Government has also extended the Temporary Business Energy Support Scheme (TBESS) until the end of May, while making it more accessible.

In order to help more businesses to qualify for it, the threshold for qualification will be cut from the current 50% increase in electricity or gas costs compared to the same period a year ago, to a 30% increase. Those changes will apply retrospectively from the start of last September.

The level of relief will also increase from 40% to 50% of eligible costs from 1 March. The payment will remain subject to a monthly limit, but that will also rise from the current €10,000 to €15,000 per month per trade or profession from next month.

Payment will be subject to an overall cap of €45,000, up from €30,000 where the business is carried on from more than one location.

The Government said the changes are subject to State Aid approval from the European Commission.