Are salons really at the cutting edge of tax avoidance?

http://www.guardian.co.uk/theguardian/2012/mar/23/salons-cutting-edge-tax-avoidance

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It's a rare budget that hits pensioners, but a rarer budget still that hits hairdressers. George Osborne described it like this: "Some companies are using the VAT rules that exempt the rental of land to avoid tax." What bastards. Who would do a thing like that? Big Pharma? British Aerospace? Damian McBride, a former special adviser to Gordon Brown, described his reaction on a brilliant blog about how budgets work. "That's Hairdressers! …Gordon would never touch it."

Not all hairdressers are on one giant VAT dodge, otherwise there would have been some public outcry and we would all, by now, be doing each other's hair (we would call it peer-to-peer grooming, it would be somewhere between Zopa and a zoo, and it wouldn't matter what we looked like, because we'd all look the same).

A small number of salons have a small number of stylists renting a chair from them. In Bournemouth, the practice isn't very common. "It's quite old school," Suzi Penglase, who works in Scissors, told me. "Nobody here will be affected – we're all on staff." I asked her if there was any budgetary measure that would be unpopular in the salon. "Well, what was in it?" "Pensioners pay more." "That's just mean." Her colleague, Rufus Geary, said: "I don't really follow it." He's 19 years old, and salaries for trainee hairdressers aren't high, so he'll also be affected by the freeze on the minimum wage for the under-21s. "I've got friends who work for supermarkets earning twice as much per hour. But they don't have the same prospects, they're just stacking shelves."

I cannot help noticing, in young people, an unshakeable tendency to look on the bright side. Katie Jones, 21, who works on reception in Toni & Guy, says that her financial concerns go in this order: she can't foresee getting the deposit together, with her boyfriend, for a mortgage; youth unemployment is an issue; petrol is very expensive; food prices are high. Specific to this budget, though, the main thing is the 37p on cigarettes. "I don't smoke but my boyfriend does. And this might make him give up."

In Hair 4 Divas, Sarai has been working part-time since last year, having been unemployed for six months. The extra tax on the hairdresser's chair would be the least of her problems, even if she were renting, which as we've established, is very mid-20th century. She's worried about the implications of the budget generally. "I just think it's promoting the people that already have money. I don't know what they're trying to prove. And it also makes me think Labour were more for family. I thought David Cameron was all for family, but that's not how it's working out."

However, it's the impact of recession, rather than this particular budget, that worries her. The salon mainly puts in extensions, which are £99 a go. "That includes the hair," she says, in an affable, what-a-bargain tone of voice. It's quite a lot, and quite an easy thing to strip out of a household budget. They've been really quiet since Christmas. "Come on, if you look at the street … shops are closed. It doesn't look like a normal, happy place." And what about pensioners? "Well, I don't see a lot of them, we'd normally send them next door."

Next door (it's a very salon-dense part of the world) is Design Salon, which is run by a man who decided halfway through that he'd prefer to be anonymous. The recession has worked out pretty well for him – he used to rent a chair at other places, then they all started to close. So he took advantage of both his eviction and the low rents to set up his own business. He won't be affected by the VAT rise; he doesn't smoke; he doesn't have a view on his pensioner client base. "We don't talk about money. We talk about what the client wants to talk about." And what do they want to talk about? "Mainly it's about beauty and being fat."

It's weird to go to all the hairdressers in a town and not meet anybody who'll be affected by the hairdresser VAT, because there's nobody who was even taking advantage of the classic hairdresser loophole to begin with. I wonder if the chancellor realises how many of those old-school independent salons have closed. But never mind, eh? Better luck with the revenue changes to static caravans and a very specific sub-section of hot food.