Beauty salons call for raise to VAT threshold following NHF survey

In reaction to the Government’s “call for evidence” on VAT registrations, UK beauty and hair salons have stated that they want more equal treatment between businesses that employ staff and those who are using self-employed individuals.  

Trade association the National Hairdressers’ Federation (NHF) collected views from its beauty and hair members on the UK’s current VAT threshold, which is at £85,000 (higher than the rest of the EU where it averages around £29,000), as well as finding out how the VAT policy affects different sectors, to help the body put forward suggestions for change.

Many in the business commented that they believe there is unequal treatment of VAT between salons who employ staff and those using self-employed individuals.

They said earnings of the self-employed would not reach the UK’s current threshold as they trade as individual businesses, while a salon employing staff is treated as one business and will pay VAT on their combined turnover, resulting in having to charge their clients an extra 20%.

The Government has pledged not to change the UK VAT threshold before April 2020, but the fact there is a call for evidence suggests that things may change in the long term.

Three changes the NHF will be championing for its members are:

Hilary Hall, NHF chief executive, said: “We already know VAT registration thresholds will stay as they are until at least April 2020, so there will be no overnight changes. The Government’s call for evidence is their first step to understanding the key issues and how current VAT policy affects different sectors.

“We have responded to this, and to a Treasury Committee enquiry on the same topic, to make sure the voice of the hair and beauty industry is heard loud and clear.”