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Personal Care industry bites back at bitter-sweet Budget

Gaelle Walker
04 March 2021

Chancellor Rishi Sunak’s 2021 Budget holds bitter-sweet implications for the UK’s beleaguered personal care sector, key industry representatives claim.

While some funding initiatives, such as the Restart Fund of up to £18,000 for all personal care sector businesses, have been cheered, news that the sector would not benefit from a much-campaigned for VAT cut to 5%, has been ill-met.

While welcoming some of the other new measures announced, including an extension of the business rates holiday beyond its current end date of 31 March and an extension of the furlough scheme until the end of September, the British Beauty Council said it was “bitterly disappointed,” by the decision not to cut personal sector VAT and would “continue to work with both BEIS and the UK Treasury on this as a matter of urgency.”

“I welcome the announcements but we will remain committed to campaign for a VAT reduction of the personal care sector,” chief executive officer Millie Kendall said.

“Businesses told us in June last year what would make their recovery more viable and the vulnerable, larger VAT-registered businesses did and still do believe that a VAT reduction is key to this.

It seems like a simple mechanism which would help activate recovery for a services-based sector and help keep staff employed,” Kendall added.

Also hitting out at the news was Toby Dicker, co-founder of the Save Our Salons (SOS) campaign for an emergency VAT cut.

Dicker, who operates five ‘The Chapel’ hair salons across London, Kent, West Sussex and Buckinghamshire, said: “Once again our sector has been overlooked in this pandemic and our plea for additional support has been ignored.

“We are of course hugely grateful for the support of furlough and the rates cuts, but all we ask is that the government gives us the same VAT break they’ve given to other parts of the hospitality sector, as we’re in a similar position in terms of running costs.

“We’ve been offered the same support as other high street retail, many of whom have been able to continue to trade online, but we don’t have this luxury.”

Also included in the 2021 Budget was an extension to the Self Employed Income Support Scheme until September, along with new eligibility criteria - with everyone who filed a tax return in 2019-20 now able to claim for the first time.

Those whose turnover has fallen by over 30% can claim 80% back and those who have lost less than 30% of turnover can claim 30%.

The Apprenticeship Grant was also hiked to £3,000.

Also reacting to The Budget, National Hair and Beauty Federation chief executive Richard Lambert said the organisation would “continue to press the case for a short-term reduction in VAT to help the hardest-hit hair & beauty businesses to recover.”

However, Lambert cheered other initiatives such as the Restart Grant and further funding for the self-employed, which he said would “throw a lifeline to struggling businesses and professionals.”

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