Salon Employers Association launches to represent VAT-paying salons

Salon owners including Hellen Ward have formed an association to represent salons and spas that pay VAT and are PAYE-registered, to campaign for reform on fiscal and tax issues.

The Salon Employers Association was created by a group of salon owners including PB columnist Hellen Ward and The Chapel Group’s Toby Dicker.

It is the new incarnation of the Save Our Salons group, which was originally set up a year ago to lobby Government for a VAT cut during the pandemic.

The new Salon Employers Association (SEA) has launched this month with the strapline "Fairness and Parity for the Hair & Beauty Sector" and the key objective of campaigning on both ongoing and new issues which affect the sector financially.

Initial aims include a reduction in VAT and National Insurance contributions to better reflect the labour-intensive nature of the industry.

Speaking about its initial plans, co-founder Toby Dicker said, “We are already speaking to lobbyists to help us with the campaign because we see that as a really important part. The hospitality industry has got a very strong lobby and they're the ones that have had the VAT reduction and are continuing to have support throughout this period. We don’t think our industry is understood or has a loud enough voice.”

While he praised the work done by other associations within the hair and beauty industry he added that the SEA believes the interests of VAT and PAYE-registered businesses in the sector are not being correctly represented.

“I think we have to at least have a voice and a moment, I don’t think we’re being represented correctly,” he added. “If the industry average is around 65% of businesses are self employed, and the industry organisations are representing the majority of the industry in their opinions, then our voice is not being heard at all. However, that one third of PAYE-paying employers, and VAT-paying salons pay more than half the tax. Our membership so far contributes more than £180 million to the treasury.”

The SEA membership so far have 816 salons, employing 9,161 staff, between them. The founders are now calling on more VAT and PAYE-registered beauty salon businesses to join and add their voice to the campaign.

Salon Employers Association main campaign objectives

1. For labour-intensive salons to be exempt from Employers NI contributions if their payroll represents 50% of their net turnover or more (currently 13.8%, rising to 15.05% in April 2022).

2. To adopt a similar VAT model as Ireland, and pay a split rate of VAT - with VAT paid at a reduced rate of 10% on hair and beauty services (and retail sales to remain with VAT at 20%) plus to campaign for a reduced VAT threshold of circa £35,000.

3. To consider a reduced rate of Corporation Tax at 10% to help reduce our tax burden.

4. For the apprentice wage rate to remain the same throughout the duration of the training period and for the wage rate to be the same regardless of the age of the apprentice (maximum of 3 years).

5. For holiday pay to be competitive across all business models.

How to join the Salon Employers Association

Membership is free and open to any salon or spa business that is VAT registered, is a PAYE employer, and provides ongoing training and/or apprenticeships to educate and help create the next generation of salon professionals. Join the Salon Employers Association here.