A "luxury VAT" and two years of pandemic take beauty centers and hairdressers "to the limit": "It is unsustainable"
The arrival of ómicron at the end of November caused the cancellation of numerous Christmas company dinners and large family gatherings, it has "greatly contracted turnover" in the personal image sector. With few people to do hair and makeup, beauty salons and hairdressers have closed 2021 with "catastrophic" figures, according to workers in the sector.
With VAT remaining at 21% in 2022 and a "very slow recovery", the outlook for 2022 is not "hopeful" and the fear that "clients will abandon us and look for cheaper services", spreads between the majority of union workers.
"The situation is really dramatic," says the spokesman for the Business Alliance for the Lowering of VAT on Personal Image and owner of several hairdressers in Madrid, José Luis Azañón.
Sales have fallen by 32% and losses exceed 1,200 million
According to employer data, sales in the personal image sector have fallen by nearly 32% in the last year compared to 2019, the year before the pandemic, and according to the latest estimates, at the end of 2021 the sector has lost 1,272 million euros.
“Continuing as before is materially unsustainable and after two years of the pandemic suffering these continuous billing drops, we are at the limit,” he adds.
The president of the Senate annuls the vote that lowered VAT in hairdressersThe absence of events such as weddings and banquets or the fact that many companies have continued to bet on teleworking has further weighed down their billings, which bear VAT as a "luxury good", which is pushing many workers to work in the black, according to industry data.
"In 2012 we assumed a VAT increase of 13 points because, as they told us, a bank bailout had to be avoided and that it was going to be something temporary, ten years later we did not ask for VAT to be lowered, only for it to be returned to us," he argues. Ana Orea, a worker at a beauty and hairdressing center in Lleida.
This rise turned hairdressing salons, beauty salons and beauty salons into a "merely self-employment and subsistence" sector, with very small profit margins, "between 3 and 5% per year if things went well for you," argues Azañón . Now after two years of coronavirus and without direct aid due to the pandemic, those margins have disappeared.
VAT at 10%, a vital necessity
“During the pandemic, the Government declares us an essential sector. All essential sectors have 10% VAT except one, us”, says resignedly from the Madrid Hairdressers Association and owner of Hairdressers X, Virginia Velasco, while wondering why, but she is clear who to point to.
“We have never acted for or against any political party, nor will we. What we are clear about is that of the 25 parties that vote both in Congress and in the Senate, 24 are in favor of the restitution of our VAT and the only one that is against it is the PSOE”, adds Velasco, who is also part of of the platform that asks for a VAT reduction.
00.07 min As late as it takes - The VAT claim of hairdressers - 09/14/21Although a few years ago the PSOE did show its support with a non-law proposal to restore the previous VAT, after "five refusals" continued during 2021 there are no forecasts of a short-term reduction in the tax by the Government, which causes that from the sector they expect that 10.7% of the salons will throw the blind during 2022.
"The only thing they are causing with this refusal to restore VAT is the shadow economy," warns Azañón emphatically, who points out that since March 2020 approximately 50% of the jobs in the sector have been lost, and many of them are " have recycled” working on 'b' in order to “survive”. "Approximately between 20 and 25% of our sector is underground," she calculates.
Mobilizations coinciding with the electoral campaign in Castilla y León
Santi Moliné had four hairdressing salons at the end of 2019 in Albacete. Of the 20 employees he had, he now has half and he doubts that he can keep the four salons open this year, he says.
“We are paying a luxury VAT, but in reality we are an essential service and now more than ever on a psychological level to help people look better after everything that has happened,” he says sadly.
In a desperate attempt to get the Government to agree to restore the 2012 VAT, from the Business Alliance for the Lowering of VAT on Personal Image they have announced mobilizations for the coming weeks and making them coincide with the electoral campaign in Castilla y León in several cities of the autonomous community.
They see in these next proposals their last bullets to “save their businesses”. “We no longer know who to turn to, we do not know what to do, we do not know what measures to take beyond making ourselves present in an important electoral campaign such as that of Castilla y León, expressing our firmest negative to this situation that is generating our sector and that leads us to ruin”, concludes despairing Azañón.
