Irish Hairdressers Association warn of more businesses closing after Budget announcement

The Irish Hairdressers Federation (IHF) has today, Tuesday 7^th October, welcomed the news from Minister Paschal O’Donohoe that VAT within the hairdressing industry will be reduced from 13.5% to 9% – however, they have also raised some concerns…

Announcing the measure, the Minister for Finance said:

“I am reducing the VAT rate as it applies to food and catering businesses, and for hairdressing services, from 13.5% to 9%. This measure will take effect from the 1st of July 2026 and will cost €232 million in 2026 and €681 million in a full year. It reflects our commitment to support businesses in the service sector who are facing increased cost pressures. Furthermore, it will support more than 150,000 jobs in these sectors right across the country.”

Commenting on the announcement, Lisa Eccles, spokesperson for the IHF, said:

“We welcome the Minister’s commitment to reducing VAT within the hairdressing industry to 9%, which is indeed good news for our sector. However, this decision comes with a strong sting in the tail, as the measure will not take effect until July. Many politicians assured us during our meetings in the run-up to the Budget that this VAT change would become a reality, and while it is, the delay leaves our members in a precarious position. There are 267 days between now and July, and I fear for our members’ futures. How many businesses will need to close before action is taken sooner?,” she told Wexford Weekly.

The IHF has warned that hairdressing businesses are already struggling with some of the highest costs in Europe. Ireland’s salons face the second highest energy bills in the EU, many members continue to carry warehoused debt liabilities to Revenue, and insurance premiums remain punishingly high.

In addition, the sector is bracing for the introduction of pension auto-enrolment in early 2026, which will further increase costs.

Speaking to Wexford Weekly following the announcement, Lisa Eccles added:

“We are very aware of the cost-of-living crisis, and many of our members are reluctant to increase prices for their customers at this time. While today’s announcement is welcome, it is also tinged with disbelief and disappointment. Our industry needs support now, not months from now.”

The IHF will continue to engage with Government to seek an earlier implementation of the VAT reduction in order to protect businesses, jobs and the communities they serve.

The Irish Hairdressers Federation is the representative body for Irish salon owners, representing over 500 salon owners nationwide, with a total of 30,000 people employed.