The Hair and Beauty Industry Confederation (HABIC) has called for supports to ensure the future sustainability of the sector where many businesses are struggling to survive.
HABIC has written to the Government to highlight the devastating impact of Covid-19 on the sector here.
It said that many businesses are struggling to remain as a viable going concern, while many are further challenged by a huge increase in black market trading.
Salons and operators have not been allowed to open yet this year and were closed for 22 weeks in total last year.
HABIC has 2,500 members around the country and overall there are 9,031 businesses in the sector.
A report from economist Jim Power highlighted the impact of the pandemic on the sector and the numerous measures required to ensure it is sustained into the future.
The economic value of the sector in 2019 was €2.624 billion, but this fell to €1.740 billion in 2020.
In 2019 the industry provided 30,800 jobs and 18,480 indirectly. These numbers reduced to 27,000 direct jobs and 16,200 indirect jobs in 2020. Those numbers continued to decrease.
In order to support the hair and beauty industry, HABIC wants the 9% VAT rate to be made permanent.
It also said the Government needs to extend the lower VAT rate to the beauty sector, saying this would help the legitimate operators compete against the non-legitimate operators and undermine the black economy in beauty and hairdressing services.
It also suggests that a "stay and spend" type scheme should be introduced and which would only apply to registered legitimate businesses.
By giving a tax credit to customers, clients would be enticed back to the salons which would provide support to struggling businesses seeking to re-build; and it would help divert business away from non-legitimate operators who make no contribution to the Exchequer.
The scheme should not be made available until eight weeks after the salons are allowed re-open, it added.
It also said that the EWSS scheme should remain in place for the hair and beauty sector until at least the end of 2021, and possibly to the middle of 2022, depending on the evolution of the Covid-related restrictions on the sector.
As employers must possess valid tax clearance to enter the EWSS and continue to maintain tax clearance for the duration of the scheme, this will further help legitimate businesses compete against non-legitimate businesses, it added.
Pointing out that legitimate hair and beauty businesses were forced to shut down in the interests of public health, HABIC said that many of those businesses are left with a legacy of accumulate rents, commercial rates, tax liabilities, and bank interest costs.
If those businesses are to re-start and become viable again, it is essential that reliefs are extended to the end of 2021, it added.
HABIC said that as businesses are allowed re-open, the costs of doing so will be significant. These include further investment in PPE, rapid antigen testing; the high fixed and variable costs in running a business under conditions of serious restrictions; and staffing problems.
The sector needs to be given a meaningful once-off grant payment to enable them to re-open in a sustainable way. The grant should be equivalent to 50% of commercial rates in 2019, subject to a minimum payment of €3,000.
Margaret O'Rourke Doherty, CEO of HABIC, said that while the organisation recognises that public health and safety is the priority, the sector has been disproportionally penalised.
She said that since the outbreak of Covid-19 and from a total of 6.8 million services, there have only been seven outbreaks identified in the sector.
