Budget 2021: Leeds hairdressers call for VAT cut as they fear salons 'left by the wayside'
Leeds salon owners have called for a VAT cut for the hair and beauty sector as they say some businesses have been left with "no money at all".
Chancellor Rishi Sunak unveiled a £65 billion spending package to support the economy in his 2021 Budget.
The package includes a new cash 'restart grant' which will start in April to help businesses reopen, with £5billion of funding awarded to businesses.
Personal care businesses, such as beauty salons and hairdressers, are eligible for the higher rate of the grant - up to £18,000.
The move recognises the economic impact of lockdowns on the hair and beauty industry, which will not reopen until April 12 at the earliest.
However, the hair and beauty industry is not eligible for the five per cent reduction in VAT which has been extended for the hospitality and tourism industry.
Carl Thompson, owner of The Opposition hairdressing salon in Cross Gates, said: "Businesses like myself now have a VAT return to pay and we've been shut for two months. It makes a lump in your cash flow - and there is no income.
"The restart grant will be tiered and I suspect it's linked to your rate-able value. Most salons of our size will get up to £6,000, not anywhere near the £18,000.
"In the industry groups that I'm part of, many of the salons are crying out that there is no money left at all.
"They have used up all they had, they are paying their bills as much as they can and there is nothing left."
Louise Howard-Long, owner of Architect Hair Salon in Headingley, echoed Carl's calls for a VAT cut for the hair and beauty industry.
But she welcomed the restart grants, which she said were "lovely news" for the sector.
Louise said: "There are a lot of salons which may well go by the wayside, which is sad.
"Luckily I’m not one of them. When I do the accounts, you see what wasn’t there. It would be lovely if this hadn’t happened, as there would be lots more money there and we would be able to plan slightly clearer."
Louise said she felt "blessed" to have been in a stable financial position before the coronavirus pandemic hit, but was concerned of the impact of other salons in the city.
She has been inundated with booking requests as she prepares to reopen on April 12 and plans to open a new salon to prepare for a busy year ahead.
Louise said: "Each time we reopen it gets crazier. We are getting so many new clients which is absolutely fantastic, but where I put them, I don’t know!
"We can’t fill our salon to capacity due to social distancing, but if I could find extra team members who are as talented as mine straight away and I had the room, I could probably fill my salon twice over".
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