Hairdressers appeal to Irish Government for retention of 9% VAT rate

Hairdressers and restaurant owners in Ireland have come together to push for a further extension of the 9% VAT rate, which currently applies to the hospitality industry, and includes hair and barbering services.

The reduced rate of 9% has been in place for a period of time, but is due to go back to 13.5% on 1 September. The last time it was extended was in February, however this was to be the final extension.

Hairdressers and restaurant owners have warned that if the reduced 9% VAT rate increases back to 13.5% again as planned, it will put some out of business.

The Irish Hairdressers Federation (IHF) and the Restaurants Association of Ireland have come together to push for a further extension of the rate, or for it to be made permanent. The two industry bodies claim people are already finding it difficult to cope with the rising cost of living and noted that putting up the cost of eating out and getting their hair done will not help.

“We are a similar kind of industry, in that we're a service-based, labour-intensive industry,” said Lisa Eccles, president of the IHF.

“The Government is bringing back the 13.5% VAT rate because the 9% rate was brought in as a Covid measure, but it is something that we had before. From 2011 to 2018, we had the 9% VAT rate to help hair salons, restaurants and hospitality, because we're a labour-intensive industry. Those kinds of cuts to the VAT rate allowed us to be able to employ more people.

“We've come through Covid, but we now have an energy crisis and our bills have not gone down. There is an energy subsidy that's available, but for many salons, they need to have a tax clearance certificate or tax compliance cert. A lot of salons are still trying to get sorted because they're still trying to organise their payment plans with revenue for repaying warehouse debt since Covid.” 

In order for the rate to be maintained at 9% after 31 August, the Dáil would have to be recalled during the summer.

“We are reaching out to our members to contact their local TDs,” added Eccles. “And we encourage all salon owners, hairdressers and even customers to contact their local TD to talk about the fact that there already is a cost of living issue that's more important. People are still going out and spending money getting their hair done. This keeps small, independent and locally-run businesses going. We want the Government to acknowledge the work we do.”