Welcome

CuttheVAT is an industry led campaign to achieve a reduction in VAT to 5% for hairdressing salons.

Everybody wins: Customers -

CuttheVAT is an industry-wide campaign being led by the National Hairdressers' Federation to achieve a wholesale "revolution” in how VAT is levied on small, labour-intensive businesses such as hairdressing salons.

What we want to see is:

• A reduction in the rate of VAT for salons operating under the HMRC's Flat Rate scheme from 13% to 5% and a cut in the headline rate of VAT for labour-intensive industries and sole traders from 20% to 10%
• A reduction in the VAT registration threshold from its current £70,000 turnover to £40,000
• Better communication of the benefits of the Flat Rate and Annual Accounting VAT schemes to encourage greater take-up of VAT registration among small businesses

Why it'll make a difference:

For customers: VAT on hairdressing is just a direct tax on hairdressing that comes straight out of clients' pockets. A lower rate will make VAT-registered salons more competitive, as well as encouraging customers away from the "cash-in-hand” grey economy.

For hairdressing salons: Creating a more responsive, flexible VAT regime that is better tailored to the needs of labour-intensive businesses such as hairdressing salons will level the playing field by reducing the competitive difference between VAT-registered and non VAT-registered salons. It could also give salons more incentive to grow their businesses to their full potential, in turn improving the health of the high street and generating more job opportunities.

• For the government: pilots in Europe have shown that having a different rate of VAT for labour-intensive businesses increased the tax take and reduced fraud and tax evasion. NHF research has indicated a lower threshold for registration would be strongly supported by many its salon owners and would encourage more firms to become VAT-registered.
  
  "Over the years we've got used to a single rate of VAT and a single threshold for entry, but there is actually no reason why all businesses, which all face different costs and pressures, should be burdened with the same, blunt method of raising tax. This ‘revolution' could mean more salons paying VAT to the Treasury as well as creating a more level playing field and encouraging more salon owners to fulfil their business potential”
  
  Mark Coray, NHF president