1. OVERVIEW
Data Summary
Data Coverage
Q1 2007 - Q2 2025
18+ years of data
VAT at 9%
2011-2019 (8 years)
2020-2023 (3 years)
Employment Peak
2022 Q3
During 9% VAT period
Current (2025 Q2)
At 13.5% VAT
Down 8.2% from 2018 peak
Key Observations:
- Ireland maintained 9% VAT for hairdressing services for 11 years total across two periods
- Employment reached its peak levels during the 9% VAT periods (2018 and 2022)
- Current employment is declining from those peak levels despite having had extended periods at 9% VAT
- Budget 2026 announced another reduction to 9% effective July 2026 (9-month delay)
- Employment shows high quarterly volatility at all VAT rate levels
2. VAT RATE TIMELINE
Complete History 2011-2026
| Period | VAT Rate | Duration | Context |
|---|---|---|---|
| Pre-July 2011 | 13.5% | - | Standard reduced rate |
| July 2011 - Jan 2019 | 9% | 7.5 years | Post-financial crisis support |
| Jan 2019 - Nov 2020 | 13.5% | 1.8 years | Return to standard rate |
| Nov 2020 - Sept 2023 | 9% | 2.8 years | COVID-19 temporary relief |
| Sept 2023 - July 2026 | 13.5% | ~3 years | Current rate |
| July 2026 onwards | 9% | Permanent | Budget 2026 announcement |
Budget 2026 Implementation Timeline
| Event | Date | Details |
|---|---|---|
| Budget announcement | October 8, 2025 | VAT cut to 9% announced for hospitality and hairdressing |
| Implementation date | July 1, 2026 | Rate change takes effect |
| Delay period | 9 months | Time between announcement and implementation |
| Annual cost | €681 million | Full-year cost of VAT reduction across all affected sectors |
3. EMPLOYMENT DATA
Source & Classification
Source: Irish Central Statistics Office (CSO) Labour Force Survey
Occupation Code: 622 (Hairdressers and related services)
Coverage: Q1 2007 through Q2 2025
Measurement: ILO employment definition
Annual Employment 2007-2025
| Year | Employment (000s) | Annual Change | Change from 2010 | VAT Rate |
|---|---|---|---|---|
| 2007 | 23.0 | - | - | 13.5% |
| 2008 | 24.2 | +5.2% | - | 13.5% |
| 2009 | 24.7 | +2.1% | - | 13.5% |
| 2010 | 22.6 | -8.5% | Baseline | 13.5% |
| 2011 | 21.6 | -4.4% | -4.3% | 9% from July |
| 2012 | 22.2 | +2.8% | -1.4% | 9% |
| 2013 | 23.1 | +4.1% | +2.2% | 9% |
| 2014 | 23.5 | +1.7% | +4.0% | 9% |
| 2015 | 23.9 | +1.7% | +6.0% | 9% |
| 2016 | 25.7 | +7.5% | +13.8% | 9% |
| 2017 | 25.7 | 0.0% | +13.8% | 9% |
| 2018 | 27.9 | +8.6% | +23.7% | 9% |
| 2019 | 27.1 | -2.9% | +20.2% | 13.5% from Jan |
| 2020 | 22.4 | -17.3% | -0.7% | 13.5%/9% |
| 2021 | 22.0 | -1.8% | -2.4% | 9% |
| 2022 | 27.5 | +25.0% | +21.9% | 9% |
| 2023 | 25.6 | -6.9% | +13.6% | 9%/13.5% |
| 2024 | 25.9 | +1.2% | +14.9% | 13.5% |
| 2025 (Q1-Q2) | 26.6 | - | +17.9% | 13.5% |
Key Metrics by VAT Period
| Period | VAT Rate | Avg Employment | Peak | Low | Volatility (CV) |
|---|---|---|---|---|---|
| 2007-2010 | 13.5% | 23.6k | 24.7k (2009) | 22.6k (2010) | 3.7% |
| 2011-2018 | 9% | 24.2k | 27.9k (2018) | 21.6k (2011) | 9.2% |
| 2019-early 2020 | 13.5% | 27.2k | 27.7k (2020 Q1) | 25.9k (2019 Q4) | 3.1% |
| 2020-2023 | 9% | 24.8k | 29.9k (2022 Q3) | 16.2k (2020 Q2) | 13.7% |
| 2023-2025 | 13.5% | 25.9k | 27.7k (2024 Q1) | 24.0k (2024 Q3) | 5.4% |
CV = Coefficient of Variation (standard deviation / mean × 100)
Employment Peaks and Trends
| Metric | Value | Period | VAT Rate |
|---|---|---|---|
| Peak (annual average) | 27.9k | 2018 | 9% |
| Peak (quarterly) | 29.9k | 2022 Q3 | 9% |
| Current (2025 Q2) | 25.6k | 2025 Q2 | 13.5% |
| Change from 2018 peak | -8.2% | - | - |
| Change from 2022 peak | -14.4% | - | - |
4. EMPLOYMENT TREND ANALYSIS
Impact of 2011 VAT Cut (13.5% → 9%)
| Time Period | Employment Change | Notes |
|---|---|---|
| Immediate (2010-2011) | -4.3% | Employment declined in the VAT cut year |
| Two years (2010-2012) | -1.4% | Continued decline through 2012 |
| Five years (2010-2015) | +6.0% | Gradual recovery and modest growth |
| Eight years (2010-2018) | +23.7% | Full period at 9% VAT - gradual growth |
Impact of 2019 VAT Increase (9% → 13.5%)
| Metric | 2018 (9% VAT) | 2019 (13.5% VAT) | Change |
|---|---|---|---|
| Annual average employment | 27.9k | 27.1k | -2.8% |
| Q4 2018 (last quarter at 9%) | 28.3k | - | - |
| Q1 2020 (pre-COVID at 13.5%) | - | 27.7k | -2.1% |
Quarterly Volatility by VAT Rate
Employment shows significant quarterly variation regardless of VAT rate. The coefficient of variation (CV) measures this volatility:
- 9% VAT (2011-2018): CV = 9.2% (moderate volatility)
- 13.5% VAT (2019-early 2020): CV = 3.1% (low volatility)
- 9% VAT (2020-2023): CV = 13.7% (high volatility, includes COVID)
- 13.5% VAT (2023-2025): CV = 5.4% (moderate volatility)
High volatility occurred during both 9% and 13.5% periods, suggesting factors other than VAT rate drive employment fluctuations.
Long-Term Trends
Key Observations:
- Employment reached peak levels (27.9k annual, 29.9k quarterly) during 9% VAT periods
- Current employment (25.6k) is 8.2% below the 2018 peak despite having had extended periods at 9% VAT
- The 2010-2018 growth period (23.7%) coincides with Ireland's economic recovery from the financial crisis
- Employment declined 4.3% in 2011, the year of VAT reduction to 9%
- Growth during 2011-2018 was gradual and volatile, not immediate
- The 2019 VAT increase (9% → 13.5%) resulted in 2.8% decline, relatively modest
- COVID-19 caused a 17.3% decline in 2020, but recovery exceeded pre-pandemic levels by 2022
5. IRELAND VS UK COMPARISON
Population-Adjusted Employment Levels
| Country | Population | Employment | Per 100k Population | VAT Rate | VAT Threshold |
|---|---|---|---|---|---|
| Ireland (2025 Q2) | 5.1 million | 25,600 | 502 | 13.5% | €37,500 (~£31k) |
| UK (2022-23) | 67 million | 398,000* | 594 | 20% | £90,000 |
| Difference | 13.1x larger | - | UK +18% higher | UK +6.5pp | UK +£59k |
*UK total = PAYE (188k) + Self-employed (210k)
VAT Rate Comparison
| Country | Current Rate | Historical Rates | Recent Changes |
|---|---|---|---|
| Ireland | 13.5% | 9% (2011-2019, 2020-2023) | Budget 2026: Cut to 9% (July 2026) |
| UK | 20% | Consistently 20%* | No changes for hairdressing |
*UK temporarily reduced hospitality VAT to 5% (July 2020-Sept 2021) and 12.5% (Oct 2021-March 2022) during COVID, but hairdressing was excluded
Employment Trends Comparison
Ireland
VAT History: Had 9% for 11 years total, currently 13.5%
Recent Trend: Declining from peaks reached during 9% periods
Key Metrics:
- Peak: 29.9k (2022 Q3) at 9% VAT
- Current: 25.6k (2025 Q2) at 13.5% VAT
- Change: -14.4% from peak
Planned Action: Cut to 9% in July 2026 (9-month delay)
UK
VAT History: Consistently 20% for hairdressing
Recent Trend: PAYE declining, self-employment growing
Key Metrics:
- PAYE: 188k (-6.5% from 2018-19)
- Self-employed: 210k (+11.1% from 2018-19)
- Total: 398k (+2.1% overall)
Pattern: Shift from employment to self-employment
Parallel Patterns
Both Ireland and UK show:
- High quarterly volatility in employment figures
- Challenges in maintaining peak employment levels
- Structural changes in workforce composition
- Similar patterns despite significantly different VAT rates and thresholds
Self-Employment Context
| Country | Self-Employment Rate | Data Source |
|---|---|---|
| UK | 53% (2022-23) | HMRC FOI data |
| Ireland | Not available | CSO data needed |
| International range | 34-62% | Eurostat/OECD (various countries) |
Note: Ireland's self-employment breakdown is not readily available in CSO Labour Force Survey public data. UK shows major shift from PAYE employment to self-employment, with total workforce remaining stable.
6. METHODOLOGY & DATA SOURCES
Ireland Employment Data
Source:
Irish Central Statistics Office (CSO) Labour Force Survey
Classification:
Occupation Code 622: Hairdressers and related services
Coverage:
Q1 2007 through Q2 2025 (74 quarters, 18+ years)
Measurement:
ILO (International Labour Organisation) employment definition
Persons aged 15 years and over in employment
Access:
CSO PxStat database: data.cso.ie
Ireland VAT Rate Timeline
Primary Sources:
- Citizens Information - Value Added Tax official guidance
- gov.ie official press releases and announcements
- Irish Department of Finance publications
- Budget 2026 documentation (October 8, 2025)
News Coverage:
- Irish Times
- RTÉ (Irish national broadcaster)
- Professional Beauty Ireland
UK Employment Data
Source:
HMRC (HM Revenue & Customs) via Freedom of Information requests
Classification:
SIC 96020: Hairdressing and other beauty treatment
Components:
- PAYE employment data from Real Time Information
- Self-employment data from Survey of Personal Incomes
FOI References:
- FOI2023/51378 (31 July 2023)
- FOI2024/200347 (30 October 2024)
- FOI2024/15284 (7 March 2024)
Population Data
- Ireland: 5.1 million (CSO 2024)
- UK: 67 million (ONS 2024)
Data Quality & Limitations
Strengths:
- All data from official government statistical agencies
- Consistent methodology maintained across time periods
- Complete population coverage (not sample surveys)
- Tax-based data provides comprehensive coverage
- Long time series enables trend analysis
Limitations:
- Ireland self-employment breakdown not readily available in public data
- Quarterly data shows inherent survey volatility
- SIC/Occupation codes may have minor classification differences between countries
- Hair services not separated from beauty services in most datasets
- Under-18 workforce not captured
- Some informal/cash economy activity not measured
Analysis Notes
- Annual figures calculated as mean of four quarters
- Volatility measured using coefficient of variation (CV = standard deviation / mean × 100)
- Per capita figures calculated using mid-year population estimates
- Percentage changes calculated from rounded figures may differ slightly from changes calculated from unrounded data
- COVID-19 period (2020-2021) shows exceptional volatility due to lockdown measures
Data Access
All source data is publicly available:
- Ireland CSO: data.cso.ie
- UK HMRC FOI: Available via Freedom of Information requests
- Analysis files: Available on request
Report Information
Analysis conducted by: SalonLogic Pro / Andrew Clelland
Independent business analyst: UK hair and beauty sector
Date compiled: October 2025
Contact: andrew@salonlogic.co.uk