NHF Members Have Strong Opinions on VAT Registration Thresholds
VAT is a topic which is endlessly debated by salon and barbershops. So when the NHF were tasked with collecting views for a recent government ‘call for evidence’ on VAT registration thresholds, the response rate was high.
As many salon owners will know the VAT threshold in the UK (£85,000) is considerably higher than in the rest of the EU where it averages around £29,000 which is roughly in line with average earnings.
Responding to the call to action, the NHF has championed the changes which members want to see most. These include raising the tax threshold significantly for all small businesses and smoothing the ‘cliff edge’ so that VAT isn’t instantly payable the moment a trader crosses the threshold.
Many salons also commented on what they see as unequal treatment of VAT between salons who employ their staff and those using self-employed individuals. Salons who employ their staff will be paying VAT on their combined turnover as they are considered one business therefore have to charge customers 20% more, whereas those who use staff and who are self- employed trade as individual businesses.
The NHF chief executive Hilary Hall has commented: “We already know VAT registration thresholds will stay as they are until at least April 2020, so there will be no overnight changes.
The government’s call for evidence is their first step to understanding the key issues and how current VAT policy affects different sectors. We have responded to this, and to a Treasury Committee enquiry on the same topic, to make sure the voice of the hair and beauty industry is heard loud and clear.”