GMSB 296
[00:00:05] Antony Whitaker: Hey, it is Antony Whitaker here, and welcome to today's episode of the Grow My Salon Business podcast. And whether this is your first time or perhaps you are a regular listener, then thank you very much for joining us today. Now, in case you don't already know, video versions of our podcast are also available on our YouTube channel.
[00:00:21] Antony Whitaker: So if you wanna put faces to the names, then head on over to Grow My Salon Business on YouTube. And don't forget to like and subscribe to the channel. So with that said, on with today's episode, now, early this year, there was a march on Parliament by hairdressers who were protesting to bring awareness to the tax situation in the UK and how it unfairly impacts on the salon industry.
[00:00:47] Antony Whitaker: I know that it got extensive coverage on social media and news outlets and other countries as well. And as a result, I've had multiple salon owners from around the world reach out to me asking what it was all about. So my guest today is Toby Dicker. And Toby is a UK based salon owner and co-founder of the Salon Employers Association, which is an organisation set up to represent salon owners of employee-based salon businesses.
[00:01:17] Antony Whitaker: And Toby, along with a small group of others representing the industry, are at the forefront of lobbying the UK government for changes to the tax system when it comes to the salon industry. So in today's podcast, we're gonna discuss a simple overview of what the existing problem is, what the possible solutions could be, and the negative impact that it's currently having on the salon industry as we know it, and lots more.
[00:01:44] Antony Whitaker: So without further ado, welcome to the show, Toby Dicker.
[00:01:48] Toby Dicker: Thank you very much for having me. Um, looking forward to it.
[00:01:51] Antony Whitaker: No, me too. Um, now we have had you on the podcast before. We didn't talk about what we're gonna cover today. What we're gonna cover today is a completely, uh, different topic, and it's largely because. Of a lot of work you've been doing behind the scenes because UK hairdressing in general obviously gets a lot of global coverage, but last month it wasn't just in the uk but you know, via social media channels.
[00:02:17] Antony Whitaker: We got a lot of global coverage and it was really instigated or you know, it was about covering the hairdresser's March on Parliament. And as a result of that, you know, it was good social media. Fodder, it certainly had hairdressers in other countries reaching out to people like me to sort of say, oh my gosh, I wonder how that could affect us in our country. I just wanna start off by first of all saying thank you to you personally. Um, and you know, I know it's a small group of people that work with you because it's a bit of a selfless task.
[00:02:53] Antony Whitaker: I know it's an unpaid task that you are doing, and you know, I know that you rarely do this. With the industry at heart, you do it because you genuinely care about this industry and you want us to be, you know, taken seriously as an industry. And ultimately really what you want is, fairness when it comes to running business. So, A lot of our listeners, uh, I think I said to you a minute ago, we've now got listeners in over a hundred different countries. Uh, obviously, uh, a big chunk of them are in the uk, but about 50% of them are in the US and, uh, Australia and Canada and English speaking countries. But there's a lot of people out there that are not really familiar with, uh, VAT and what our tax system is all about. So I thought I'd start off by, first of all, just asking you to give us a. Very simple overview of what the VAT tax system is in the UK and you know, how it compares to A GST 'cause it's very similar, uh, or a sales tax that other countries might be more, uh, familiar with. So, uh, do you just wanna give us a, a brief intro on that and then we can sort of  dive into how that impacts on us as an industry? Yeah.
[00:04:03] Toby Dicker: Yeah, I mean, VAT is, like you say, a sales tax. It's value added tax. So, uh, when the government decides. That you've added a certain amount of value, they want you to pay that t and that tact is, uh, 20% on top of your prices or, or included in your prices. And you don't pay in the UK until you hit a certain threshold, and that threshold is 90,000.
[00:04:29] Toby Dicker: So up until 90, you don't pay anything above 90%.
[00:04:40] Toby Dicker: or collected 15,000 on the government.
[00:04:43] Antony Whitaker: okay. So talk to us about how the VAT system has a specific impact on salon owners. It doesn't necessarily, uh, affect other businesses, other industries in the same sort of way.
[00:04:58] Toby Dicker: Okay. Well, it's, it's a good point actually because all businesses in the UK have a 90,000 threshold, and all businesses in the UK pay the 20%. Um, the difference is realistically with hairdressing is you add all your value through labour, so you claim a very small amount of it back. And what that means is that if you stay below the threshold, you're a distinct advantage over somebody that goes above the threshold.
[00:05:26] Toby Dicker: The basic elements, all taxes cumulatively or in different businesses affect them in different ways. And VAT hits any service based labour-based business harder.
[00:05:40] Antony Whitaker: Right. So why does it affect, so for example, why does it have a bigger impact on a hairdressing salon than, say a hardware store or a clothing store?
[00:05:50] Toby Dicker: Okay, because 60% of your cost of labour, um, and you don't claim VAT back on that, you actually claim it just on the goods you have. So the goods might be 10%, the colour or whatever you are using, you can then claim back. 10% of the VAT, so you, you end up collecting a whole 18 pence or out the 20 if you are a hardware store you've bought in those goods, and actually your costs are completely opposite.
[00:06:18] Toby Dicker: There's probably 10% labour costs and 60% the hardware goods that you buy in, and therefore you claim back 60% of the VAT and you end up with 8 pence on behalf of the government, so you are collecting more than double the tax of other business models on the high street
[00:06:37] Antony Whitaker: Right. Okay. Now we're living a time where all over the world there's a big change in the employment model that there's a real rise in people being self-employed and there are different things that drive it in different countries. One thing they've all got in common is that it's Gen Z that are driving it, that they want a different work life balance, a different way of working.
[00:07:05] Antony Whitaker: Another thing that's driving it is these things, because if you go back 20 years, we didn't have, uh, mobile phones, et cetera. Uh, and now with a smartphone, you can do all your marketing online, you can book appointments online, you can do your banking online. So. They've, we've all got those things in common, no matter which country you're talking about.
[00:07:24] Antony Whitaker: But of the things that's dramatically driving this movement towards more self-employed in the UK, which is different to what's driving it in the US and Australia, for example, or Canada, is this, um. VAT issue. So talk to us about, you know, what it looks like in the UK because it's not like we have a lot of, say, salon suites here.
[00:07:50] Antony Whitaker: We have a lot of salons that look like regular salons with 10 people in it.
[00:07:54] Toby Dicker: Yeah.
[00:07:54] Antony Whitaker: But the client doesn't necessarily realise that those 10 or 20 people are actually all self-employed working for themself. So talk to us about that and, and you know, how that's impacting on things.
[00:08:07] Toby Dicker: Yeah, I mean, it's not just VAT I mean, the VAT is a huge part of it, and that's why we campaigned on it because it would level the playing field to a certain extent. Um, it's actually employers national insurance as well. That's another thing. So 15% on top of someone's salary for, for national insurance. 
[00:08:25] Toby Dicker: So those things combined. I'll give you an example. Two salons next to each other with five stylists in each, um, and one is turning over 400,000. The other is turning over 400,000, so they look the same. And this is the point. One of those is a single business turning over 400,000. They collect 67,000 pounds in VAT.
[00:08:48] Toby Dicker: So a load of that, this one collects no VAT. And by the time you put all of those accumulative taxes through one of those businesses paying 123% more tax or more than double, which means it's almost unviable to run the employment model going forward.
[00:09:10] Antony Whitaker: Right. So what you are saying is, although those two salons are both generating 400,000, one of them, the stylists in there are self-employed and they are. Generating under the VAT threshold of $90,000. Whereas collectively in the other salon where they're all employed, it's generating well over the $90,000 up to the 400,000 as you've said.
[00:09:34] Antony Whitaker: So that's where the uneven playing field is. Yeah.
[00:09:38] Toby Dicker: Yeah, absolutely. And that doesn't happen in any other area because sales tax comes in at much lower levels. Um, so there isn't the incentive to avoid, I think one of the, yeah.
[00:09:55] Toby Dicker: But I do have something against the tax system. That means that employees or employers can't give employees what they deserve because they end up being the most taxed business on the whole high street. That includes all other businesses on the high Street. So it isn't just that our two models are a problem, it's the fact that we're already paying three times more tax than anyone else on the high Street as well.
[00:10:19] Antony Whitaker: Okay. Now where do you come up with that number? Three times more tax.
[00:10:24] Toby Dicker: Well, you could go to TOC UK and you could download the report that the um, CBI Economics wrote, and you can see those numbers. So three times is based on a turnover business with exactly the same rent, exactly the same rates and everything else. But one business has those 60% labour costs, 10% cost of goods sold.
[00:10:48] Toby Dicker: One has the opposite. So 60% the products they're buying in and the 10%, 12% labour costs. Um, and. The maths comes out, that one pays 300,000 in tax and one pays a hundred thousand. 
[00:11:04] Antony Whitaker:  That's, it.
[00:11:04] Toby Dicker: that's been done by CBI Economics, who are one of the most respected economic report writing organisations in the world.
[00:11:11] Antony Whitaker: And it's because we're such a labour-intensive industry. Yeah.
[00:11:16] Toby Dicker: Yeah, we, labour-intensive industry, the labour taxes we contribute are five times higher than that other retail because. Many of us for each pound that comes in the door and we don't claim any of the VAT back versus their 60% that they claim back, or we claim back 10%. Yeah.
[00:11:36] Antony Whitaker: Got it. Okay. So, um, talk about the impact that that has on, for example, uh, recruitment or apprentices. What sort of impact is that having on the industry in the uk?
[00:11:49] Toby Dicker: Look, the simple thing is, is that. The employment model is on a precipice to an, to an extent. You have to charge 50% more to be vulnerable, to pay the same salaries, and that's what we've done as a business. But there's many that can't when they're surrounded by businesses that don't do that. Um, and what that means is that.
[00:12:11] Toby Dicker: Because there's less and less margin. There's less and less affordability, and the cost of apprenticeships and so on has gone up in the UK massively.
[00:12:20] Antony Whitaker: Hmm.
[00:12:21] Toby Dicker: we could, it's a big subject, but it's gone up. The report states that employment effectively will be over by the end of this Parliament 2030, and the apprenticeships may well be over in the next two years.
[00:12:34] Toby Dicker: I've got five apprentices right now on hold happening.
[00:12:40] Antony Whitaker: right.
[00:12:40] Toby Dicker: Um, so apprentices were at 16,000 a year in 2015, and we forecast them to be at zero by 2027, which I think
[00:12:51] Antony Whitaker: something is done.
[00:12:53] Toby Dicker: sad because it's simply unaffordable
[00:12:56] Antony Whitaker: Hmm.
[00:12:56] Toby Dicker: self-employed Individuals can't afford to take those apprentices on either. There isn't a solution.
[00:13:03] Antony Whitaker: Right. Okay. Um, and you, you've got multiple salons. I'm not sure how many you've got these days, but you've got five. So does it impact on expansion plans for yourself or other people who you know, would love to open a second or third or fourth, or six or seventh salon? What sort of impacts it having in that area?
[00:13:23] Toby Dicker: Um, my suggestion is that nobody will be growing if they're doing the standard model. Matter of fact, that's born out across the industry. Our. Uh, aggressively grow and promote what we do, promote the human connection we create, promote the amazing team atmosphere we have, and be able to justify charging that 50% more.
[00:13:48] Toby Dicker: That's our approach. But as a, as a whole, across the industry, if you are surrounded. By everyone that's paying much less, then that motivation is incredibly hard to keep, uh, and, and grow. And I can't see any, uh, large salon business growing unless they run, uh, self-employment model of sorts. My other challenge around that is that there are a lot of, um, there are a lot of legislation that's in place.
[00:14:24] Toby Dicker: It's so grey that no one really knows what they should be doing.
[00:14:28] Antony Whitaker: Mm.
[00:14:29] Toby Dicker: Now, if I could legitimately put people self-employed and make it easy for them and pay them more, I'd do it. But I think there are some real challenges coming along the way, and I think you talked about phones and social media. I think it's been constantly pushed and pushed and pushed and pushed.
[00:14:45] Toby Dicker: It's better to be self-employed and there are a lot of challenges.
[00:14:50] Antony Whitaker: Mm.
[00:14:52] Toby Dicker: And to be honest, all employers that I know are completely flexible on time and hours and all the rest of it. Now, this is a financial decision for people who believe they're gonna get more. And what it actually does is it suppresses prices and its a spiral where everyone's competing with each other.
[00:15:13] Toby Dicker: And I think that's quite sad as well, because our industry deserves more respect than that.
[00:15:18] Antony Whitaker: Okay. Now I know you, um, along with a couple of other people, a few other people have been very heavily involved in trying to lobby government for change. You've not just been, you know, holding placards out the front of, um, you know, parliament. You've
[00:15:31] Toby Dicker: Yeah.
[00:15:32] Antony Whitaker: sat down at the table with people. Um. What, uh, you know, one, one thing that often comes up is, well, why should the hairdressing industry be treated any differently?
[00:15:41] Antony Whitaker: Now, you've explained why they should be treated differently, but if I'm a, you know, a restaurateur, well, there, there's actually a really good example in, uh, during Covid, the hospitality sector, restaurants were treated differently.
[00:15:52] Toby Dicker: they were.
[00:15:53] Antony Whitaker: how do you. Like, do you get that said to you when you are talking to the powers that be, when you are talking to government departments about why there should be a case for treating the industry addressing industry differently?
[00:16:05] Antony Whitaker: What, what sort of, you know, impact or what sort of, feedback do you get from them?
[00:16:10] Toby Dicker: Yeah, I mean, I think that's exactly it, because they don't have the time to fully understand what's going on. I think the thing that's most unique about our industry is that you can have two different business models next door to each other. Like you've already said, they look identical. The consumer has no idea of the difference, and yet one is treated completely differently from a tax perspective.
[00:16:30] Toby Dicker: That could not happen in a restaurant. It could not happen in the shoe shop. It could not happen in the hardware store, and it couldn't happen in the jewellers, and yet it can in our industry, and that means we end up. Fighting against other, which I think is really sad. I think if the government looked at tax overall and said, actually, this industry is more taxed and they've proven it to us, they've reduced that in other sectors before.
[00:16:58] Toby Dicker: They've done it in farming. They've done it in, uh, building of, in, in certain building industries for listed buildings. Uh, they've done it elsewhere and there are things that are exempt, like medical procedures. So there's an awful lot of Botox going on for medical reasons, not for cosmetic.
[00:17:19] Antony Whitaker: Oh yeah. Right.
[00:17:23] Toby Dicker: Extra difficult, and unless you get the time to really explain it, you can't get that across. There's no other business on the high street that pays more tax first and foremost. And secondly, that can have two different business models side by side. And if we levelled that playing field, we could, we could bring back, you know, the excitement, the growth, um, the brilliance of British hairdressing.
[00:17:51] Toby Dicker: And that's what I'd love to do. I'd love to bring that together. But at the moment, there's too many, everything's binary. You hate self-employed you, you do this, you are that, and it's, everything's binary. It needs to be a collective response that gets a fair deal for hairdressing. And if we don't do that, I believe all the things we say in that report are gonna come true.
[00:18:15] Antony Whitaker: Right. Okay. Um. I mean, we are based in the uk,
[00:18:20] Toby Dicker: Yep.
[00:18:20] Antony Whitaker: in Ireland. Uh, they have a, uh, very different system again, don't they? Uh,
[00:18:26] Toby Dicker: Yeah.
[00:18:26] Antony Whitaker: in Ireland, I believe it's 13.5% on
[00:18:30] Toby Dicker: Yes.
[00:18:31] Antony Whitaker: and 23% on product. Uh, is that the sort of thing you'd like the government to do here?
[00:18:38] Toby Dicker: The Irish government when lobbied around 15 years ago now, recognised that there are certain labour-intensive industries, and one of those was hospitality restaurants, um, and the other was hairdressing. And they all came together to lobby the government to understand that, and the Irish took that on board.
[00:18:57] Toby Dicker: Now, in Covid, that was dropped to 9%. Actually, uh, on services and it, there's a lot of talk around the new government in Ireland bringing 9% back in again. 'cause they recognise exactly that we're, we're paying so many labour tax already that there should be an offset. Um, that's not gonna change in Ireland.
[00:19:17] Toby Dicker: Um, and it's great that they're considering bringing it down. It. Should be, should they also have a lower threshold? They have a 30,000 threshold in the us. Most states have zero threshold. In Australia, I'm not sure what it is, but the GST is 10%. 
[00:19:36] Antony Whitaker: Yeah, I think their threshold's 65 or $70,000, so
[00:19:39] Toby Dicker: So about 30,000 pounds,
[00:19:41] Antony Whitaker: So about 30,000 pounds,
[00:19:41] Toby Dicker: yeah, exactly 35 euros. 35 pounds. I personally believe that would sort the problems out. Every single self-employed person would disagree with me. So again, we have to come to a consensus, uh, on that. And at the end of the day. This is more a political problem than an economic problem.
[00:20:02] Toby Dicker: When when the people that are looking at this from an economic point of view, they go, yeah, it makes complete sense what you're saying. When they try and put that into a law, you then get the challenges. So most people in government who's ever listened get the problem. They just dunno what to do about it.
[00:20:21] Antony Whitaker: Right. So you just said, uh, something like, I think that's fair, but then you said, but most self-employed people would disagree with that. Explain to the listeners what you mean by that and why they might disagree. Because you
[00:20:36] Toby Dicker: Well,
[00:20:36] Antony Whitaker: lowering the threshold, weren't you?
[00:20:38] Toby Dicker: yeah, most of the industry now in the UK, some 65 to 70% are in the self-employed model, which is five, six times what the a UK average is. Um, and. There's lots of reasons for doing that, as I said before, but if you lower the threshold, the time when you start to have to charge VAT or collect VAT on half of the government comes in earlier, and therefore they'd say that's penalising them.
[00:21:06] Toby Dicker: And again, I, I can sympathise with that. But if that means that there's no future training and the imbalance stays at 120, 23%, IE. 2.25 times more taxed for an employed model, then I don't think there's a future for training in the industry and for growth really. I just think we're just gonna be an island of people that have learned online
[00:21:30] Antony Whitaker: Mm-hmm.
[00:21:30] Toby Dicker: and end up in salons, and that's my prediction for the next 20 years.
[00:21:35] Toby Dicker: There'll be a few salons that can stay and, and offer, offer that opportunity, but, but very few. Not trying to be down and bleak about it. I just wanna try and do something about it now.
[00:21:48] Antony Whitaker: Yeah,
[00:21:48] Toby Dicker: Um, yeah.
[00:21:50] Antony Whitaker: Yeah. Well, it's that word fairness. Like if you, if the government were to reduce the threshold, meaning the point at which people start paying VAT from currently 90,000 down to I'll pluck a figure out the year and say 30,000, would mean that a lot more self-employed people would have to be charging VAT as well.
[00:22:11] Antony Whitaker: Um,
[00:22:11] Toby Dicker: Agreed. Uh, and again, I'm not here to argue the benefits or otherwise. All I'm saying is right now there needs to be some levelling
[00:22:20] Antony Whitaker: Yeah.
[00:22:21] Toby Dicker: that rate was brought down to 10%, that would level things out. If the that threshold was brought down, that would level things out
[00:22:29] Antony Whitaker: So,
[00:22:29] Toby Dicker: and we could then respectfully.
[00:22:32] Antony Whitaker: The threshold being lowered or the, uh, VAT amount being lowered or both of them?
[00:22:39] Toby Dicker: Look, it has to deliver from a government perspective, right? So I'm not gonna get into the detail of that. What I will say is hairdressing services in general should be paying less. So I think if the, if service-based businesses who are paying all their labour taxes paid north percent, that would be perfect.
[00:22:59] Toby Dicker: The government are never gonna take that. So 10% first. Uh, and then once you've got that lowering, the threshold actually becomes more palatable because the individuals aren't paying as much. Uh, if.
[00:23:12] Antony Whitaker: Yeah. Yeah.
[00:23:13] Toby Dicker: I think 10% would actually solve the problems in itself. The government would never be able to sell that to the electorate, and that's the problem.
[00:23:23] Toby Dicker: It's not that I don't agree that it should be zero,
[00:23:26] Antony Whitaker: Hmm.
[00:23:26] Toby Dicker: it's that they're never gonna be able to sell that, and they're much more likely to come after our industry or come after all industries in terms of attacks, by lowering the threshold, I dunno.
[00:23:36] Antony Whitaker: Yeah.
[00:23:36] Toby Dicker: And I don't have any inkling of that. A lot of the decisions are made by government departments and, and that, and, you know, we just wanna make, we just wanna make our industry have a loud enough voice so that we're respected and we're taken seriously and we're, it's recognised what we do and deliver and how hard amazing people in this industry work and that mean.
[00:24:01] Antony Whitaker: Yes.
[00:24:05] Toby Dicker: Because they're adding way more to the economy per pound turned over than any other business. So that's where I am with it. Look, it's a very personal thing about the lowering the threshold. It brings us into line with the rest of the developed nations. Um, it is, it's increased in my opinion for political reasons, but it's very much my opinion, not SEA, not BHC and all the other organisations
[00:24:31] Antony Whitaker: Yeah, yeah, yeah.
[00:24:32] Toby Dicker: I.
[00:24:34] Antony Whitaker: Well, it's, it's, yeah, you, you, you don't have to be Einstein to sort of figure out that the government are actually shooting themselves on the foot in a lot of ways by the industry becoming more and more self-employed, they're collecting no VAT from them. The government are collecting nothing.
[00:24:54] Antony Whitaker: Whereas if they were to lower the threshold down to say 30,000 or whatever, then it would be an even playing field for everybody. And if you were someone who didn't have a dog in the fight, I don't have a dog in the fight, but I am, at least in the industry,
[00:25:10] Toby Dicker: Yeah.
[00:25:11] Antony Whitaker: someone who wasn't even in the industry looking at this, you'd go. Well, of course that should happen. That would just
[00:25:16] Toby Dicker: Yeah.
[00:25:16] Antony Whitaker: fair that everybody pays VAT. Not that you have these two different business models running side by side, but the obvi and obviously the upside of all of this, if that was to happen, um, and I would say it's an upside, is that it would be good a lot of people then that are self-employed would then want to go back to become employees. Business and that would be better for the industry in terms of training, apprenticeship opportunities, that sort of stuff. So in terms of the long-term benefits, you agree with me on that? That that would be better for the industry at large?
[00:25:56] Toby Dicker: Again, I have a particular opinion and I do have skin in the game. I agree with you, and I think that would be better. I think what's not thought about is that those individuals who are below the threshold now might want to grow a business, and now the incentive is so strong to avoid doing so
[00:26:15] Antony Whitaker: Mm-hmm.
[00:26:15] Toby Dicker: that they're always gonna be.
[00:26:18] Toby Dicker: In that place. Now, of course there's a place for that and there should be a choice, but it should be a choice based upon, you know, what's what's right and fair. And, and that's where I am. I know lots of people say, well, I have to do X, Y, and Z to run my business. You get the tax advantages. I don't mind if I personally pay more tax.
[00:26:36] Toby Dicker: I don't mind if all the taxes stay the same. I don't mind director just as long as it's equal. 'cause you can't compete fairly when it's not equal. Now again, as I say, different people have different things. I'm not even asking for parity, I'm asking for a closing of the gap
[00:27:02] Antony Whitaker: Yeah. Yeah.
[00:27:03] Toby Dicker: so that the, the advantages I have, you know, allow me to keep employing, allow me to train another five apprentices next year,
[00:27:12] Antony Whitaker: Hmm.
[00:27:13] Toby Dicker: me to do.
[00:27:14] Antony Whitaker: Which is, which is good for everybody.
[00:27:16] Toby Dicker: Well, I think so. But again, as I said, this can be a very divisive topic
[00:27:22] Antony Whitaker: It sounds like you’ve been bashed up a bit, Toby. I don't, I don't know. But it's, it sounds like you've had some, uh, fairly fierce, uh, defenders of the other side of the coin.
[00:27:33] Toby Dicker: yeah, look there, of course there's gonna be, and at the end of the day, I have to, you know, work for the people that are crying down the phone to me who are saying, I'm gonna end it all literally.
[00:27:45] Antony Whitaker: Hmm
[00:27:50] Toby Dicker: You know these people, this is where the industry's at, and that's the saddest bar. People online, if they have a good profile, can make as much noise as they want. And people have personally attacked me about how I've been with them. And that's fine. I'm not gonna take it on personally. I'm gonna keep fighting for my team, keep growing My team, I've just celebrated two people have been with me for 25 years
[00:28:15] Antony Whitaker: Fantastic.
[00:28:17] Toby Dicker: one would hope. Um, and I want, I want them, actually, this is a bit that always gets missed. I want my team, who I regard as peers and equals to have the same tax opportunities as anyone else. Why should they forfeit? 35, 40% of what they bring in for a company just because of a tax system.
[00:28:42] Antony Whitaker: mm.
[00:28:43] Toby Dicker: Because every tax in, in every equally applied tax when applied to hairdressing, hits us harder than anyone else.
[00:28:51] Toby Dicker: That's, that's where I am. Um, yeah. I'll be beaten up and I, I can handle, I've got thick skin. It's okay. I've also got thousands of people thanking our group for what we do.
[00:29:04] Antony Whitaker: Yeah.
[00:29:08] Toby Dicker: And it is, um, it is, there's a huge emotional toll and there are times where I wish I hadn't done it.
[00:29:17] Antony Whitaker: I'm sure there are. Yeah, I'm sure there are. Um, what is meant by the term disguised employment? 'cause it's something we talk about a lot here, but a lot of other countries would go, what do they mean by that? I.
[00:29:30] Toby Dicker: Okay, you've already basically summed it up. There are two salons next door to one another. For all intents and purposes, the public can't tell the difference. Um, they make people self-employed to avoid the taxes and yet still treat them as employees. Tell 'em what to wear, tell them when to come in, um, tell them what hours to open, tell them what products to use, and so on.
[00:29:56] Toby Dicker: And so. Good operator who rent chairs, who do services and charge things in the right way. And there are some people that have done this because they have no other choice. And I don't even, there are many who are forced to do this. It's not bad. It's just if all of the salons around you are doing this, you feel you have no choice.
[00:30:17] Toby Dicker: And I've been in conversations with them and gone, do you know you might be doing this illegally And they say It might well be, but I, I lose my home. I go into this model and the government have been so soft on this, or the HMRC have been so soft on this and they haven't given us correct guidelines. The guidelines are incredibly loose that no one knows,
[00:30:40] Antony Whitaker: Yeah.
[00:30:40] Toby Dicker: that’s the point.
[00:30:41] Toby Dicker: Um, and again, if the playing field was equal, it wouldn't happen. It simply wouldn't happen. People would have a choice to do one or the other, and it would feel completely okay, but instead they talk about enforcing against bad people. I don't see anyone as bad in this industry.
[00:30:59] Antony Whitaker: Hmm
[00:31:00] Toby Dicker: It's just I don't have a choice.
[00:31:03] Toby Dicker: I have to do this to survive. And once most of the industry is doing that, the rest has to follow and what suffers is
[00:31:12] Toby Dicker: The excitement that comes in the industry, the collaborative working together, the, you know, the awards that we all do together, the things that have made our industry amazing. The eighties and nineties and early noughties were incredible for excitement and growth. And look at what the British hairdressing can do in the world.
[00:31:32] Antony Whitaker: Mm.
[00:31:32] Toby Dicker: we've lost all of that because it's all about money. It's all about the finance it's all about arguing between people and yet
[00:31:42] Toby Dicker: Investing in that future and bringing back the excitement would happen if everybody could just get on with doing hairdressing, not fight and scrabble around for whatever happens next.
[00:31:54] Antony Whitaker: Yeah. Um, just for our US audience, well, for all of our audience, uh, you just, you just went HMRC. Uh, we all know HMRC stands for her Majesty's Revenue and Customs, or his
[00:32:06] Toby Dicker: Mm-hmm.
[00:32:06] Antony Whitaker: Revenue and Customs now, meaning the tax man.
[00:32:09] Toby Dicker: Yes.
[00:32:10] Antony Whitaker: Uh, so if you are, you know, for the American audience, the IRS or you know what, whatever your, uh, government departments are that collect tax, that's what Toby meant by that. The other thing you, you touched on, you just sort of glossed over it really quickly, but I think it's a really important part of this is you said, uh, the disincentive for growth, and just explain what you mean by that. So, I'm a hairdresser. I'm self-employed. Or maybe I'm in a small salon. I mean, let's face it, a good hairdresser, a good stylist is gonna be able to generate a hundred, uh, 90,000 pounds a year behind the chair working full time.
[00:32:47] Toby Dicker: Yeah.
[00:32:47] Antony Whitaker: if you are in, say, the north of England or in a small town or village or whatever, then you are probably not gonna generate that sort of money. And you might have a salon with a couple of people and still manage to sit underneath that 90,000 pound threshold. What I, what I, what I wanted you to sort of expand on is what's happening for a hairdresser, whether they're employing one or two people and sitting under that threshold, or whether they're a self-employed person and sitting under that threshold. I. What is it that's actually happening that they get to 80, 85,000 a year and do they go, I'm not gonna work anymore because I've gotta pay a lot more tax. Is that literally what's happening, that they just start working a four-day week or a three day week so that they sit underneath that 90,000? Uh, pounds.
[00:33:39] Antony Whitaker: And so therefore it is a disincentive to grow, to grow a business. I mean, sorry, I've asked the question and I've sort of been answering it as well, but
[00:33:46] Toby Dicker: No.
[00:33:47] Antony Whitaker: to get your, uh, insight on that.
[00:33:50] Toby Dicker: Again, I can't speak for everybody, but that's the way it feels. It's the way it feels that it's a massive disincentive if you turn over 80
[00:34:01] Toby Dicker: Business keeps 89,000 hundred 99. If you turn over 90 and one pence, you've got pay immediately, 15 in VAT, and you might claim back 1500. So call it 13. That's a big chunk of change and you are not gonna be better off until you hit around the 120,000 mark
[00:34:27] Toby Dicker: so if you're at 85,000 you've gotta grow your business by 50% to even be better off. And that is really sums it up.
[00:34:37] Antony Whitaker: Yeah, to
[00:34:37] Toby Dicker: I, I think
[00:34:38] Antony Whitaker: basically.
[00:34:39] Toby Dicker: I, I think, I think implying one person, maybe you can s below the threshold, but let's think the minimum wage is 30 grand. So 45 is, is not very much money to turn over. But you know, some people stop working, perhaps some people.
[00:34:55] Toby Dicker: Don't put it through the books. Perhaps. Uh, some people take a job in a supermarket and do it on the side, perhaps. I'm not saying that's what happens all the time, but it's, but it's a massive disincentive and I think people say, oh, I turned over X, Y, and Z when I was in a salon. And then, you know, you are complaining about this.
[00:35:14] Toby Dicker: And then you asked what their turnover is and they go, uh, they don't answer and there have been big
[00:35:21] Antony Whitaker: Mm
[00:35:25] Toby Dicker: Self-employed salons or collaborative spaces where the owner have said no and in my place pays VAT.
[00:35:34] Antony Whitaker: mm Okay.
[00:35:35] Toby Dicker: stories of people running two different businesses where one is. A hairdressing business, one's a beauty business, and one washes the hair and one cuts the hair. Those things are stories.
[00:35:48] Toby Dicker: They're things that are out there. And again, I'm not wanting to divide the industry. I'm wanting to try and say, if we had a levelling of the playing field, these things would go away.
[00:35:59] Antony Whitaker: Yeah 
[00:36:00] Toby Dicker: These chants people are taking would go away. And how that levelling of the playing field comes about is a reduction in VAT, a zeroing of VAT
[00:36:10] Toby Dicker: A reduction in threshold, an understanding from government that that is, it's not for me to make policy,
[00:36:15] Antony Whitaker: Mm.
[00:36:16] Toby Dicker: but what I would say is if you get a level of the paying field, the incentive, the all the growth, growth starts immediately. 'cause you don't have any barriers.
[00:36:25] Toby Dicker: young people who are in that Gen Z who have chosen to go into self-employment, who actually are feeling entrepreneurial, can just grow, and this is what we've been saying. 2.25 times more, tax stops, all of that dead.
[00:36:41] Toby Dicker: It stops growth, it stops. Entrepreneurialism and it stops those things.
[00:36:46] Antony Whitaker: Mm.
[00:36:47] Toby Dicker: as I said, I'm not having a go at anyone, but if you make the playing field more level, industry thrives.
[00:36:55] Antony Whitaker: So it's more professional for all of us. And, and that brings me on to something I wanted to ask you about, and it's a little bit UK centric, but exactly the same thing will exist in every other country because. Often what happens, and I've, I made a little bit of a list of names of organisations, British Hairdressing Consortium, uh, Salon Employers Association, the one you co-founded, Hair Barber Council.
[00:37:21] Antony Whitaker: I've heard you mention them. Uh,
[00:37:23] Toby Dicker: Yep.
[00:37:23] Antony Whitaker: Hairdressing Federation,
[00:37:25] Toby Dicker: Yep.
[00:37:26] Antony Whitaker: for British Hairdressing, NHBF. Uh, British Beauty Council, Save our salons. There's all these sort of organisations, and I'm wanting to ask you, we shoot ourself on the foot by doing that as an industry? Because there's too many bodies that are representing us, lobbying on our behalf, we lack a cohesive voice. Have I mistaken that or is that a correct assumption to make?
[00:37:56] Toby Dicker: It's an absolutely correct assumption to make and um, what Barry, who runs The Fellowship did was bring us together under the BHC. So. The idea is if we don't agree on a way forward, which we're all trying to do and present the information in the right way, people will stop listening.
[00:38:18] Antony Whitaker: Right.
[00:38:19] Antony Whitaker: the BHC.
[00:38:20] Toby Dicker: But the BHC is the British Hair Consortium?
[00:38:23] Antony Whitaker: consortium. Yeah. And they've all been pulled in underneath that, have they? So
[00:38:28] Toby Dicker: Every single organisation has been invited.
[00:38:30] Antony Whitaker: right.
[00:38:31] Toby Dicker: Um. And there are a number who have come together to represent, and that's how we got
[00:38:37] Antony Whitaker: Good. Good.
[00:38:39] Toby Dicker: industry as possible. There are a couple of organisations that we're building trust with and trying to grow that opportunity because everyone has a slightly different interest in this.
[00:38:50] Toby Dicker: Um, but we'll have to wait and see. You know, I constantly put out there that we need one voice.
[00:38:58] Antony Whitaker: Yeah.
[00:38:59] Toby Dicker: And the things we can do, it is like the threshold, right? Most people, certainly in the self-employed sector don't want that said, so we don't go forward with that being the solution. We go forward with a reduction in 10%.
[00:39:14] Toby Dicker: It gets suggested that a threshold would be, would be good, but. Collectively, we have to agree. And when we sit in that room, we discuss those things, what we can agree on, and then we take that forward. But yes, without all organisations, uh, presenting the same information and doing that collectively, it is never gonna help.
[00:39:35] Antony Whitaker: Mm. Okay. So yourself, one or two other people, however many, uh, sit down with the government representatives who have the power to make these changes. Where are we currently with that? I.
[00:39:51] Toby Dicker: Hmm. I have been removed personally from some of these groups because I say passionately what it's like. And when I was told, when I was given a. Some information that wouldn't help us in the slightest. I said, well, what's the point in anyone paying their tax then, you know, and that's a challenge. Where are we much further ahead than we were a year ago, two years ago?
[00:40:21] Toby Dicker: Different government departments approach it in different ways. Um, I think it's a real shame that. The, that some departments don't have a specific voice from salon owners. And that's, that's the challenge. But I, I'm, I, I don't want to get into saying one organisation's good and bad and, and, and the other isn't.
[00:40:47] Toby Dicker: Um, things have moved forward. Move forward. Discussions are had. Sometimes you're asked, not say anything. I think the biggest plus of all is. MPS came together for the first time in history to debate the hairdressing industry in Parliament a week or so ago.
[00:41:07] Antony Whitaker: I saw that on the, on the news, 
[00:41:10] Toby Dicker: Amazing.
[00:41:10] Antony Whitaker: So that, that is a huge achievement, isn't it? You know?
[00:41:14] Toby Dicker: Yeah, and I could get emotional about that, but there are salon owners who are delighted about that. From cross, from across section of parties across the industry. They backed.
[00:41:24] Antony Whitaker: Mm.
[00:41:24] Toby Dicker: What we were talking about and a review of tax or a levelling, a playing field, but specifically a reduction in VAT. I don't think that'll happen because politically it's too hard, but the fact that the conversation is happening now is a really positive thing,
[00:41:38] Antony Whitaker: Mm-hmm.
[00:41:39] Toby Dicker: and it's an example of where coming together is going to improve those things.
[00:41:46] Antony Whitaker: Yeah.
[00:41:46] Toby Dicker: There are some things, you know, people know because I've said things in the past 
[00:41:50] Toby Dicker: That I haven't seen us all come together. I think we have a better opportunity now and we're trying very hard to talk to those organisations to do that. But yeah, we had a debate in parliament. It may may be taken further. Other conversations are happening, some that I'm party to and many that I'm not because of my very direct style of communication.
[00:42:14] Antony Whitaker: Yeah. Well sometimes
[00:42:15] Toby Dicker: Diploma.
[00:42:16] Antony Whitaker: to get through, don't you? Yeah, exactly. Okay.
[00:42:18] Toby Dicker: you have to sometimes to, to get it in the news, but politicians don't necessarily like that approach
[00:42:24] Antony Whitaker: Yeah. Okay. Um, where does licensing I. Registration for the industry fit into this puzzle because, in the UK I mean, everyone in the UK will know that there is no licensing and registration at the moment, whereas Americans would be aghast at that because everyone has to have a license. So, and there's often talk here about we should be licensed, et cetera. Um, is there a direct link to that in terms of being taken more seriously and, you know, that sort of thing as a, as an industry body.
[00:42:57] Toby Dicker: Yeah, I think that's a really important point. It's something that the hair and Barber Council who we work closely with, um, support and always have done. I think it's more needed now than ever because you've got, I. People trading in all sorts of different ways. I think the biggest thing that's also in the news is, um.
[00:43:17] Toby Dicker: Barbers who are not trained and laundering money, it's a big part of what's going on in, in the industry at the moment. So barbers are being forced out of business 'cause they can't compete. But realistically they're competing with people that are laundering money and doing haircuts for a fiver Um, so I do think that registration and collectively the body coming together.
[00:43:41] Toby Dicker: Um, would massively improve things because we'd know who works in the industry. We'd know how many people that is. We'd, you know, we'd have all of that. The black economy would be much more challenging.
[00:43:52] Antony Whitaker: Mm.
[00:43:53] Toby Dicker: and, um, I think it would, again, bring professionalism. You know, in the uk, gas fitters have to have something called the Corgi Register,
[00:44:03] Antony Whitaker: Mm-hmm.
[00:44:04] Toby Dicker: registered Gas.
[00:44:06] Toby Dicker: Earn a lot more money because they're accredited and respected and that is another reason for us to be, yeah, taken more seriously. It's again, it's, again, it's the same thing where hairdressers who are pat on their head and told, oh, thanks very much for cutting our hair. We're brilliant, brilliant people.
[00:44:26] Toby Dicker: Hairdressers are the most emotionally intelligent people in the world. They understand more about people than most psychologists. They make people feel amazing. They fix, they spot medical challenges for people. they understand. They see people age and grow and develop and go through their divorces, and they understand all of that.
[00:44:54] Antony Whitaker: Hmm.
[00:44:55] Toby Dicker: And yet they're treated with complete disdain. And [00:45:00] that's what makes me more angry than anything, to be honest.
[00:45:02] Antony Whitaker: And is that particularly at a government level when you're trying to get changes done? Is that what you mean specifically, or not
[00:45:08] Toby Dicker: It's in, no, I think it's, I think it's in general, I think societally, people that use hairdressers and understand it absolutely respect that enormously. But I think that also we're not serious business people. We're not this, we're not that. You know, there's been some unbelievable entrepreneurs in this industry.
[00:45:28] Toby Dicker: Look at what the guys at Toni and Guy did. You know, look at what they've created. Look at what Sassoons did, look at what a lot of the greats, Trevor Sorbie did. Look at what those people did. They transcended their industry and they changed the world in many ways. I know that sounds a bit melodramatic, but, but it's not.
[00:45:49] Antony Whitaker: definitely.
[00:45:50] Toby Dicker:  they did,
[00:45:50] Antony Whitaker: yeah, yeah.
[00:45:51] Toby Dicker: and yet were still treated with disrespect.
[00:45:54] Antony Whitaker: Mm.
[00:45:54] Toby Dicker: There are some brilliant people in this industry
[00:45:57] Antony Whitaker: Yeah.
[00:45:58] Toby Dicker: each time one of those taxes goes up, you break them a little bit more or you get them to leave or you, yeah, make them feel less. Hairdressers might not have the schooling smarts or the 
[00:46:13] Toby Dicker: Academia, but I'll put any MP up against any one of them to understand people and the hairdresser would beat them hands down. And it's much harder what the hairdresser does every day. That's how I feel. And I think we should have respect. I think we should be understood. I think all of us. Less percentage of the tax that we bring in.
[00:46:38] Toby Dicker: And I think that we should just be taken seriously for once, because then we can bring back growing high streets, bring in millions of people in footfall every day, bring back creativity and excitement that's been sucked out of society. Yeah. And, and contribute. But while all the while we're dragged into, you should work in Sainsbury's.
[00:47:01] Toby Dicker: Sorry. You work in a supermarket for five days a week and then I'll do hair at the weekend. That's wrong.
[00:47:08] Antony Whitaker: yeah, definitely.
[00:47:09] Toby Dicker: get paid a proper living
[00:47:11] Antony Whitaker: Mm-hmm.
[00:47:11] Toby Dicker: for being a hairdresser, not get 40% of it taken by tax.
[00:47:15] Antony Whitaker: Mm-hmm. Do you, um, you know, obviously you meet and. Have a lot to do with a lot of salon owners across different parts of the industry.
[00:47:24] Toby Dicker: Mm-hmm.
[00:47:26] Antony Whitaker: do you think that there's a lot of salon owners that sort of, I don't wanna say they don't care, but they don't get involved in this because they don't really understand it.
[00:47:36] Antony Whitaker: They don't understand tax and they don't think that they can have any impact on change. So they sort of feel a bit disconnected from what's happening and they just find another way to make it all add up, so to speak.
[00:47:50] Toby Dicker: I, I think that's a bit of an underestimation of, of business owners in the industry in terms of a thing. I think people are very, very engaged. They just felt like they were on their own. They thought they were the only one. And the amount of times I've heard, I thought I was a failure.
[00:48:09] Antony Whitaker: Mm. Yeah.
[00:48:15] Toby Dicker: Extra.
[00:48:20] Toby Dicker: They might feel like that on their own. They might have been told they're not great at school or whatever. But no, I think people are really engaged. I think the fact that we've managed to lobby so many individual MPS and will continue to do so and they've got the reaction they've wanted and they've got the backing of the organisation that can, can give them the response they need, has been really, really good.
[00:48:42] Antony Whitaker: Yeah.
[00:48:45] Toby Dicker: There are many salon owners who haven't heard of us or haven't come together who don't understand the impact of what's coming their way. And to be true, it's the 1st of May first payday since all these tax rises came in. So we haven't been affected yet, and I have great fear for the next six months. But what we're gonna do is bring more of that campaigning and target those MPs one by one.
[00:49:11] Toby Dicker: And continue to, to, to share that.
[00:49:15] Antony Whitaker: Yeah. Okay. How, how can hairdressers get involved? Someone who's listening to this in the UK how, how can they get more involved behind this?
[00:49:24] Toby Dicker: Okay. If you are a, if you are a, a salon owner, um, or, or you work in a, an employed Salon, salon Employers Association, uk, sign up. We send you messages and, and, and, and you know, you can help support in that way. Um, if you are anything else, have a look@bhc.org, uh, dot uk and that will give you other organisations that you can link into, um, and just have a voice, you know, step up, be part of it.
[00:49:56] Toby Dicker: Um, as I say, there are many people that disagree with a lot of what gets said, and there's a lot of anger out. My main goal is to get us respected and heard.
[00:50:09] Antony Whitaker: Yeah. Okay. Alright, well listen, we need to, uh, start wrapping things up here. I'll put those links that you just, uh, mentioned. I'll put them in the show notes. I know you are not big on social media yourself. I know your salon brand is not big on social media very consciously. 
[00:50:27] Toby Dicker: Yeah.
[00:50:28] Antony Whitaker: we spoke about that in our last podcast. Uh, but is there anywhere else you'd like to send them, any Instagram channel or anything like that? They should join connect.
[00:50:35] Toby Dicker: Salon Employees Association. There's about seven and a half thousand followers on that. Um, we communicate through that and it's been an effective, uh, use system. Great video content on there. Um, and our YouTube channel as well. Salon Employers Association's got some of the videos on it. I'd love to send you a link to the campaign.
[00:50:55] Toby Dicker: Video is a great piece of work, so yeah. Great.
[00:50:59] Antony Whitaker: Okay. Alright, well listen, I'll put those links in the show notes for today's podcast, uh, for wherever you are listening to this. And if you've enjoyed this podcast with Toby and. Uh, you wanna share it with other people, then please do so. And don't forget to subscribe and leave us a rating review on the Apple Podcast app.
[00:51:16] Antony Whitaker: So to wrap up, Toby Dicker, thank you for being on this week's episode of the Grow My Salon Business podcast.
[00:51:23] Toby Dicker: Thanks very much for having me. Thanks for listening and allowing me to share this in not just a soundbite. I think often soundbites are the things that divide us and perhaps coming together and having a conversation is what's gonna bring the industry together
[00:51:38] Antony Whitaker: Definitely. Well, thank you for giving up your time and thanks for everything you do.