The VAT rate for hairdressers is due to revert to 13.5% on 1 September after remaining at 9% since November 2020.
When it comes to VAT in Ireland, hairdressers are classified under hospitality, with the rate originally cut due to the impact of the Covid-19 pandemic.
This reduced rate was extended a number of times, most recently in February of this year, when the Government announced a third and final extension.
The Irish Hairdressers Federation (IHF) joined forces with restaurant owners during the summer to push for a further extension of the 9% rate, warning that an increase could spell the end for many businesses.
The two industry bodies said that people were 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 would not help.
“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,” said Lisa Eccles, president of the IHF.
“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.”
