Reduced VAT for hairdressers key measure in Budget 2021

A range of hair and beauty industry supports have been included in Budget 2021, which was announced by the Irish Government on 13 October.

Among the key measures to be introduced is a reduction in the VAT rate for the hospitality sector, which includes hairdressers. From 1 November, the rate will be cut from 13.5% to 9%, until the end of 2021.

The new Covid Restrictions Support Scheme (CRSS) was also announced. Businesses that are forced to close temporarily due to Covid-19 restrictions will be eligible to receive up to €5,000 per week. It will be available to those that have suffered an 80% decline in turnover during the period of closure. This payment will be based on their average 2019 weekly turnover.

The Budget also included a three-month rates waiver extension to December 2020, while self-employed tax credits will increase from €1,500 to €1,650. The Employment Wage Subsidy Scheme, which was recently extended to the end of March, has now been extended to the end of 2010.

According to the Minister for Finance Paschal Donohoe, the country will not see the positive economy of 2019 again until at least 2022, but the weeks and months ahead will be steps towards a recovery. “We will prevail, we will come through this,” he said in his opening speech to announce the Budget. “And from the ashes of the pandemic, together we will build a stronger and more resilient Ireland. Budget 2021 is a bridge to that future.”

The Irish Hairdressers Federation welcomed the reduced VAT rate and other Budget supports. “We are pleased that the Department of Finance took on board our pre-Budget submission. This will be a vital support to local economies and provide a much-needed jobs boost to small towns and villages across Ireland. As we saw during the lockdown, hair salons play a crucial role in local communities, and it is good to see this being recognised by Government.”