The Hair and Beauty Industry Confederation (HABIC) has called on the Government to ensure the sector has access to financial support in 2022 and beyond.
HABIC's pre-Budget submission highlights the key issues facing the sector and the supports needed to ensure the future sustainability of hair and beauty salons across Ireland.
During the Covid-19 lockdowns in 2020 and 2021, the sector was effectively shut down for almost ten months, during which time business costs continued to accumulate.
HABIC said that for an already low margin and challenged business sector, this has created a very difficult environment and one which threatens the viability of many businesses and jobs.
In today's Budget submission, the confederation said the 9% VAT rate should become permanent for the entire personal grooming industry and must include beauty services.
A lower VAT rate on a permanent basis would help combat the significant shadow economy, ensure job creation, and maintain employment, it said.
HABIC also said it believes the Employment Wage Subsidy Scheme should remain in place for the hair and beauty sector until at least the end of 2022, and possibly to the end of 2023, depending on the evolution of the Covid-related restrictions on the sector.
It also said that consideration should be given to writing off some of the accumulated financial liabilities including rent, commercial rates, tax liabilities and bank interest costs.
"The reality is that these accumulated debts are a result of Government restrictions, rather than decisions taken by the business owners. The continuation of the rates waiver is essential to the sustainability of many enterprises where productivity, capacity and consumer footfall has not reached pre-pandemic levels," it stated.
In today's submission, HABIC noted the "extremely active and thriving shadow economy" within the hair and beauty sector and it urged the Government to tackle the issue through the establishment of a dedicated unit working to support the sector and the exchequer.
It called for enhanced investment to tackle the hidden economy, while a dedicated unit to combat the informal market would support workforce development and sustainability.
Margaret O'Rourke Doherty, CEO of HABIC, said the operating environment for the hair and beauty sector has been very difficult since March 2020.
"The sector was shut down by the Government in the interests of public health for 22 weeks in 2020, and 20 weeks in 2021 and since reopening, business sustainability has been a massive challenge," Ms O'Rourke Doherty.
She warned that without significant financial support, many businesses will struggle to survive.
"Many businesses are left with a significant legacy of rates, rents, tax liabilities and bank interest accruing. At present, there are huge difficulties in retaining and sourcing staff who have been forced out of the industry," she said.
"These issues are further compounded by the thriving shadow economy in hair and beauty services which has prospered since March 2020," she added.
