Cost Of A Hair-Do May Go Up If...

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Cost Of A Hair-Do May Go Up If VAT Rate Returns To Normal In March

Tom Douglas
Tom Douglas

05:09 31 Jan 2023

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A group representing hairdressers says the lower VAT rate needs to remain in place for the sector.

The rate is due to rise from 9 to 13.5 per cent from the start of March.

In 2011, VAT for hairdressers and hospitality businesses was reduced from 13.5 to 9 per cent to help stimulate jobs and growth in the sectors during the financial crash.

The rate is set to return to 13.5 per cent from the 1st of March.

But Vice President of the Irish Hairdressers' Federation, Lisa Eccles, says a government report carried out in 2018, found the lower 9 per cent rate was actually of huge benefit to the economy:

"It provided economic growth for the sector."

Lisa continued, saying she doesn't understand how the rate could be changed now, in a year that's going to be as challenging or even more so than the years during the crash.

Rossa Danagher runs two salons in Donegal and Sligo.

He says ultimately any VAT increase will lead to businesses having to increase their prices for customers:

"Well I don't think any salon can afford to absorb it."

"Unfortunately it's going to go back to the consumer."

Irish Hairdressers' Federation, fears legitimate businesses increasing their prices will lead to stylists and customers turning to the shadow economy.

That is estimated to cost the State 50 million euro in lost VAT revenue.

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