Carlow barber says recently increased VAT rate puts pressure on small businesses

Barber AJ Ademole in his shop in Carlow town (Niall Carson/PA)
Barber AJ Ademole in his shop in Carlow town (Niall Carson/PA)

A Carlow barber has said that the recently increased Value Added Tax (VAT) rate will put pressure on him amid ever-increasing costs to run his business.

The VAT rate went up from 9% to 13.5% for the hospitality sector in August. There had been calls for a drop back to the 9% rate ahead of Budget 2024 being unveiled.

Multicultural barber AJ Ademole said the reduced rate helped his business as the costs of everything else remained high.

“The 9% was actually a great help,” Mr Ademole said, who runs AJ’s Barber’s Studio, located at the old Potato Market in Carlow town.

“The 9% made things easier. You have to pay rent, rates, VAT, you have to pay employee PAYE, employee liability tax, and all of that accumulates.”

He said that the cost of products such as shampoos, conditioners, balms and gels has all gone up in the past year.

His barbers has been open for a year and a half, after its launch was stalled due to the Covid-19 pandemic.

“In the barber industry, it’s not the same because people are not spending as they used to,” he said. “Wages are the same but everything else is going up, there isn’t enough money to go around.”

He said that Brexit has also added costs for products that he imports.

He added: “The rent is going up, service charges are going up, electricity has gone up, everything to do with running a business is gone up.”

He said that he did not qualify for the Temporary Business Energy Support Scheme (TBESS) which offered relief of up to 50% for businesses that can prove their electricity costs have gone up by 30% since last September.

The scheme ended last month.

“A lot of small businesses need more help for them to continue operating,” he said.

The Budget announced a series of cost-of-living measures, which includes 250 million euro in supports for businesses.