Hairdressers call for lower VAT rate

Jan. 17, 2011 - PRLog -- A major financial services company has added its voice to growing calls for fairer VAT. Business Cash Advance http://www.businesscashadvance.co.uk advances funds to small businesses such as hairdressing salons, restaurants, garages, shops and pubs and the money is then repaid from future credit and debit card receipts.

This week, Business Cash Advance joined with the National Hairdressers Federation in calling for a lower rate for hairdressing salons. With VAT now at 20 per cent, the National Hairdressers Federation has stepped up its campaign to get the government to reduce VAT on salons to five per cent and thus boost the sector.

There is a European precedent for charging micro labour-intense businesses a lower rate of VAT, says NHF general secretary Eileen Lawson: “The chancellor could have implemented the European Economic and Financial Affairs Council’s concession for a lower VAT rate for labour-intensive small businesses which would have produced the results in our sector that he was looking for – more investment in employment and a more cost-competitive market. He has missed a golden opportunity.”

Business Cash Advance has many hairdressing clients and director Richard Morley is sympathetic to the NHF campaign. “It does seem a bit unfair that labour-intensive industries such as hairdressing have to pay the same rate of VAT as manufacturing businesses that can offset the tax against capital investment. For hairdressers nearly all the investment is in people so it can’t be offset. Higher prices have to be passed onto the consumer as there is often no margin to squeeze. And small businesses are much less able to absorb the VAT rise than larger ones.”

However, this is a good time for hairdressing salons to think about refurbishment and decoration, while salons are traditionally quiet. “It is a quiet time now but that’s why it’s also an excellent time to do some refurbishment or restocking. Or maybe think about marketing. Business Cash Advance has the resources to advance funds for hairdressers who are thinking about using January for this purpose and don’t want to go to their banks for the money nor dip into their cash reserves.”

As well as using January to smarten up their premises, many hairdressers also use this time to take a long look at their marketing strategy and try to find ways to busy up their quiet times. This is examined on the Business Cash Advance blog this week:  http://businesscashadvance.co.uk/blog/ which also illustrates the various sectors that Business Cash Advance helps with this unique form of funding.