IHF seeks VAT reduction to 5% due to rising costs

The Irish Hairdressers Federation (IHF) has called for a VAT reduction due to rising costs.

The industry body recently conducted a survey of almost 300 members, with 47.5% experiencing a decline in consumer demand in the second half of 2022, as rising prices impacted clients’ disposable income. Approximately a quarter said that demand had remained the same.

The IHF wants the Government to cut the industry’s VAT rate to 5% from the current 9%, which was originally applied to the industry in 2011 in response to the economic downturn, and was reintroduced in 2020 due to the pandemic.

This is due to expire in February, but the IHF is now calling on the Government to reduce it to 5%, having reduced the rate of VAT on newspapers to zero from 1 January.

The IHF said employment within the industry is likely to have risen to 21,000 in the third quarter of last year, based on Central Statistics Office data. This is five times more than the number of people employed by newspapers, it said, representing almost 0.8 per cent of total Irish employment.

Against the backdrop of rising costs, the industry is more exposed than many others to adverse economic developments and that unemployment within the industry has the capacity to rise very rapidly, it added.

The IHF also noted that the industry has also taken a particularly long time to recover from the pandemic, having faced an 'existential crisis' at the height of the crisis in 2020.

“Unlike newspapers and many other services in the economy, we couldn’t deliver our services online,” said IHF president Danielle Kennedy.

“With demand falling faster than in 2011 and business costs far higher, VAT must fall accordingly, These findings come before the full impact of inflation and interest have fully impacted on the economy and consumer demand. They understate the crisis in our industry.”