A hairdresser in north Dublin has said the government’s VAT hike will discourage others from opening their own businesses and threaten jobs in the industry.

Finance Minister Paschal Donohoe confirmed the VAT for the hospitality sector will surge from 9 to 13.5% from January 1 in Tuesday’s budget announcement.

Critics have questioned the move, saying the hike would unfairly target rural Ireland and small businesses in the hotel and bar sector, as well as hairdressers, who are also listed under hospitality industry.

Karen Murtugh who owns K-Styles in Balbriggan and employs three staff says the news comes as another blow to an already overlooked industry.

Budget 2019
Karen Murtugh, owner and hairdresser at K Styles Hair Salon (Liam McBurney/PA)

“It’s a bit mad obviously, I wasn’t expecting this high an increase as it is already high enough, and we pay an additional VAT on hairdressing products.

“There’s no doubt it will impact prices, you don’t want to put up prices as customers already give out about how expensive it’s be become.

“You’re forced to make a decision, is it coming out of my own pocket or do I put up prices in the salon, which means less customers.

“Even paying the current VAT is hard enough, this will definitely will impact a lot of salons.”

One of the first to criticise the move was Independent Kerry TD Michael Healy-Rae, who called the move a “slap in the face” that unfairly targets rural communities.

Ms Murtugh agrees with the criticisms, saying smaller businesses will suffer unfairly, forcing customers into the cities and effecting local economies.

“Bigger salons won’t be as affected, but smaller businesses will be forced to put people out of jobs or take a step back from hiring,” she said.

“You can’t compare Dublin city centre and a little village salon.

“Where I am, it’s a little salon, a pub, a shop and that’s it.

“I feel like you’ll see a lot of smaller towns without hairdressers after this.

Ms Murtugh, who opened her salon six years ago says she has received no help from the government, and has built the business herself from the ground up.

“I’ve never once got help from anyone, you’re on your own with prices going up constantly.

“Its crazy, you feel unfairly targeted, the government should do more for small businesses, they think of big businesses all the time, that employ 500 people, but what about us?

“I don’t even know why we’re listed as hospitality, I feel like they have nowhere to put us.

“Its because we’re looked down upon, there’s this mentality like; ‘Sure they’re only hairdressers’, but everyone you know has a hairdresser, every town has one, it’s horrible and tough.

“If I knew all this at the start, I probably wouldn’t have opened my own business,” she said.

The current 9% rate was introduced in 2011 in an attempt to reduce some of the financial stresses on the hospitality sector during Ireland’s recession.

The Restaurants Association of Ireland has called on Tourism Minister Shane Ross to resign over the VAT hike, saying he has “consistently failed” the sector.