Tayside beauty salon entrepreneur Charlie Taylor has issued a “save our salons” plea ahead of today’s Budget.
The businesswoman has called on Chancellor Rishi Sunak to do more for the industry and treat it on equivalent terms to the hospitality sector.
The Chancellor is expected to extend a cut in the VAT rate from 20% to 5% for the hospitality industry for another three months today.
However, Ms Taylor, who owns salons in Dundee and Perth, argues her sector has been hit harder than hospitality without the equivalent support.
She is calling for hairdressers to also be part of the VAT reduction, which she said could make the difference between salons surviving or closing.
‘We are all having a tough time’
She said: “I know lots of industries have had it tough – but we will have been closed for eight months out of a year.
“Certain things done by the government have been very useful, particularly the furlough scheme but we need know if it will continue and how long for.
“Even when lockdown ends, the financial support required will be significant as it won’t be back to normal.
“People’s habits have changed. They aren’t coming into city centres to have a wander and think I’ll nip in to get my hair done.
“Nobody is going to special occasions, events, weddings. None of that business is there and we are also missing all the students.
“Cutting VAT is the answer. I don’t know why hospitality was prioritised in this because we are all having a tough time.
“In the industry, we are fighting to save our salons. A VAT cut to 5% would be a big help and make it more viable for businesses to survive.”
Demand ‘falls off a cliff’ after initial rush after lockdown
Ms Taylor, who has been in the industry for 44 years and running salons for 36, said the perception that hairdressers would be busy when lockdown ends only told half the story.
Her experience from the end of the first lockdown was there was a huge rush of people wanting haircuts all at once but then demand “fell off a cliff”.
“Once salons opens again you get a mad rush of clients – it’s like Christmas all over again,” she said.
“You are trying to do your whole year’s worth of clients in a matter of weeks.
“Everybody is working flat out. But then it falls off a cliff because never before have you had all your clients at the one time.
“It will be a very long time before things even out and we need financial support whilst that is going on.”
VAT cut will make world of difference
Ms Taylor employs 30 staff between her salons in Perth’s South Methven Street and Nethergate, Dundee.
After the first lockdown the three-time winner of Scottish Hairdresser of the Year, refurbished her salons with Perspex screens installed at reception.
All staff wear masks, gloves and faceshields, as well as disposable gowns that will be thrown away after each customer.
Ms Taylor added: “There are grants but I can assure you that money comes in and goes straight back out on National Insurance and pension contributions.
“And that doesn’t cover things like rent, insurance, water rates. We’ve got computers we aren’t really using… the list just goes on and on.
“I’m OK – we are going to survive. We work hard in this business, know what we are doing and are very established.
“However, there are a lot of salons out there who are really struggling. I think the tough times are still to come.
“A VAT cut would make the world of difference.”
Survey calls for furlough extension
The call for a VAT cut was echoed in a survey of Scottish firms by the Bank of Scotland.
When asked which initiative would be most beneficial to helping their firm trade this year, a third (33%) of regional SMEs said an extension to the Coronavirus Job Retention Scheme or the introduction of a new scheme to help them retain employees.
The decision to extend furlough until September was announced on the eve of the budget.
Around one in seven (15%) hoped a cut in the VAT rate and more than one in 10 (11%) said they would be keen for the chancellor to focus on growth policies like staff training grants or business investment tax relief.
Personal care industry views heard
A UK Government spokesman said: “We have engaged regularly with the personal care industry throughout this pandemic.
“The government has put in place an unprecedented financial package worth £280 billion which businesses can continue to access.
“This includes one-off grants worth up to £9,000 for business premises forced to close, the extended furlough scheme, VAT deferrals and business rates holidays.
“Businesses can continue to access our loan schemes, now extended, defer VAT payments previously due in March, and benefit from business rates holidays, a moratorium on eviction for commercial tenants and the Statutory Sick Pay Rebate Scheme.
“The chancellor is set to announce the next stage of his Plan for Jobs in the Budget.”