In the pandemic, the government gave many concessions to the hospitality industry – however other sectors never managed to obtain a similar VAT reduction or Eat Out to Help Out equivalent, with ours being one of them. That’s why myself and other salon owners set up SOS (Save Our Salons) to campaign for a levelling up in the VAT rate and the adoption of the Irish VAT model (where the threshold is reduced, and services enjoy a lower rate than any VAT due on retail sales). Although we have not yet been successful, we won’t stop campaigning for it!
Although many of our industry’s associations and organisations aligned to represent us to BEIS (the government department set up to look after Our industry has experienced challenges that no other sector has faced, and now we are at a tipping point which could alter the industry forever, writes Hellen Ward our newly named Personal Care sector) during the pandemic, I never felt that these bodies adequately represented us: the VAT paying, PAYE employing salons who are training and educating apprentices – in short, the salon owners who are at the coalface. So, myself, Toby Dicker, Stephen Nurse and Luke Hersheson set up SEA – the Salon Employers Association -and invited Edward Hemmings to join us with his vast knowledge of apprenticeships. The SEA remit became more general as we evolved and realised that, aside from VAT, there are other issues that needed to change.
Within weeks of launching we signed up over 1000 salons, representing over 11,000 people working in the sector who have an estimated turnover of £225m. Membership is free, and our work is voluntary. We are a not-for-profit organisation and although we have minimal funding secured, we have no large sponsors.
We have secured meetings for the 10 largest employers in the sector directly with BEIS in order to share their data confidentially and substantiate our arguments.
So, what challenges do we face now? Our surveys tell us that turnover is still almost 20% lower than pre-Covid levels – the reasons for which are myriad. Client visits are less frequent – partly inspired by balayage and the trend for longer hair, less occasion hair appointments and the fact that people have moved away from cities and office jobs. The pandemic meant tourist business was non-existent and DIY box colour and home hairdressing visits impacted the traditional salon business, too. But these customer behavioural trends need to be coupled with the business and economic challenges salon owners face in order get the full picture.
Business rates are now back up to pre-pandemic levels in most local authorities. Staff are leaving to either go self-employed (believing they will be better off if they work for themselves). But now, with turnover still down, we face two more, and potentially greater challenges, like the rise in energy costs – some members are seeing their bills set to rise by over 200%. And with employer’s National Insurance rising by 1.25% in a sector which traditionally sees over 50% of their turnover spent on payroll, the impact could be devastating.
We are a unique industry – no other sector employs, nurtures and educates apprentices, a tradition which has helped us become renowned as the standard bearer globally. No other sector is as heavily taxed. So, if we don’t protect our business model, what will happen? I believe that in-salon apprenticeships could disappear, owners will be forced into becoming glorified landlords housing self-employed chair rentals, and the taxtake we generate will be lost forever.
We need to get these unequivocal messages to government now and we can only substantiate them with the data that BEIS are asking us for. Complete our surveys (anonymously if you prefer) to demonstrate how levelling up our industry can not only help save the British high street, but the industry we all love. None of us want it lost forever, so act now.
You can join at www.salonemployersassociation.co.uk/
Hellen Ward is managing director and co-founder of Richard Ward Hair and Metrospa and a founding member of the Salon Employers Association (SEA).