Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of reducing VAT to 10% in the hair and beauty sector.

VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services, including in the hair and beauty sector. Exceptions to the standard rate have always been limited by both legal and fiscal considerations.

The government recognises that accounting for VAT can be a burden on small businesses, particularly in sectors such as hair and beauty which involve selling directly to the final consumer. This is why, at £85,000, the UK has a higher VAT registration threshold than any EU Member State and the second highest in the OECD. This keeps the majority of UK businesses out of VAT altogether.