Industry bodies outline financial support needed in Budget 2022
Irish hair and beauty industry bodies have been outlining the support required to sustain the sector in advance of Budget 2022, which will be announced on Tuesday, 12 October.
In its pre-Budget submission, the Hair and Beauty Industry Confederation (Habic) has called on the Government to ensure the sector has access to financial support next year and beyond.
Highlighting the key issues facing hair and beauty businesses, it noted that the Covid-19 lockdowns shut them for almost 10 months, during which time business costs continued to accumulate. Habic said this has created a very difficult environment and one which threatens the viability of many businesses and jobs.
It wants the current 9% VAT rate to become permanent for the entire personal grooming industry, including beauty services. It said this rate would help combat the significant shadow economy, ensure job creation and and maintain employment.
It also believes the Employment Wage Subsidy Scheme (EWSS) should remain in place for the hair and beauty sector until at least the end of 2022, and possibly to the end of 2023, and that consideration should be given to writing off some of the accumulated financial liabilities, including rent, commercial rates, tax liabilities and bank interest costs.
“The sector was shut down by the Government in the interests of public health for 22 weeks in 2020, and 20 weeks in 2021 and since reopening, business sustainability has been a massive challenge,” said Margaret O'Rourke Doherty, CEO of Habic.
“Many businesses are left with a significant legacy of rates, rents, tax liabilities and bank interest accruing. At present, there are huge difficulties in retaining and sourcing staff who have been forced out of the industry. These issues are further compounded by the thriving shadow economy in hair and beauty services, which has prospered since March 2020.”
Meanwhile, the Irish Hairdressers Federation (IHF) has also asked for VAT rate to remain at 9% permanently, along with an extension of the EWSS.
In addition, it highlighted the increased cost of taking on young trainees, noting that it is costing salons up to €5,000 per trainee per year more now than in 2019. It has called for a fast-tracking of the introduction of the National Hairdressing Apprenticeship, an increase in the grant available from €3,000 to €6,000 and a commitment to a minimum number of classes per year.
“Our pre-Budget submission is a laser-focused stimulus and support package for the hairdressing sector,” said IHF president Danielle Kennedy. “It is fully costed and would deliver much-needed support for thousands of struggling salons across the country.
“As we learned during the lockdown, hair salons are a vital thread in the fabric of local communities, especially in rural Ireland. Our proposals are aimed at supporting these local salons, generating economic activity in small towns and villages, and creating new jobs for talented young people. We have been working closely with Government and officials over the past 18 months on Covid-19 issues and look forward to working with them constructively in the days and weeks ahead on our submission.”
