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Personal Care Services: VAT

Question for Treasury

UIN 144830, tabled on 27 January 2021

To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential merits of extending the temporary VAT reduction to 5 per cent to hair salons.

Answered on

4 February 2021

The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of over 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and will run until 31 March 2021.

This policy will cost over £2 billion, and it is necessary for a boundary for eligibility to be drawn. The Government keeps all taxes under review, and any future decisions on tax policy will be made at Budget.

The Government has announced a significant support package to help businesses from a whole range of sectors through the winter months, which includes an extension of the Coronavirus Job Retention Scheme, an extension of the Self-Employment Income Support Scheme grant, and an extension of the application window for the Government-backed loan schemes.

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