More than 2,000 salon owners seek VAT cut in Budget

More than 2,000 salon owners have asked Chancellor John Healey to cut VAT on hair and beauty services from 20% to 10% in this week’s Budget.

The open letter is backed by the British Hair Consortium (BHC), which says rising business costs are placing increasing pressure on traditional salon employers. Across the industry, growing numbers of stylists are moving into self-employed arrangements, often renting a chair within a salon rather than being directly employed.

Marcus Perkins has run a salon for 22 years and is increasingly worried about the industry’s future. He said rising costs make it harder for businesses to employ staff and invest in apprenticeships, while more salons turn to self-employed models to survive. “Seeing salons close on the high street is very scary,” Perkins said. “I’m very scared myself. Luckily it hasn’t happened yet but who knows what the future holds?”

A Treasury spokesperson said hair and beauty businesses play an important role in supporting jobs, apprenticeships and thriving high streets. The spokesperson added that the sector had benefited from reforms to business rates.

Salon owners also said they have been affected by increases in wage, pension and National Insurance costs. Ministers have defended changes to employers’ National Insurance contributions and increases to the minimum wage as part of efforts to improve pay, support public services and drive economic growth.

What could a VAT cut change for salons?

The BHC says reducing VAT would help businesses hire more staff, invest in training and keep more salons trading on the high street. Perkins believes that support would make a significant difference to M&M Spa, which he runs in Quarry Bank near Brierley Hill. “We can grow the business and employ more people,” he said.

Perkins said he has trained more than a dozen young people at M&M Spa over the past two decades. Stylist Trearna Hart, 21, said many of her peers struggled to establish careers after leaving college. She said she was fortunate to find an employer willing to invest in her development.

This year, Perkins said he spent about £2,000 on courses and travel costs to support Hart’s training. “It’s upsetting really,” he said. “We help people, we train, we nurture, we mentor. We help the next generation because if we don’t help the next generation, what happens to our future?”

The BHC claimed apprenticeship numbers had fallen sharply. It warned the decline could worsen if pressure on employer-run salons continued.

Why are employer-run salons under pressure?

Perkins believes businesses that employ and train staff increasingly compete against models centered on self-employed workers. He describes that as an “unlevel playing field,” because traditional salons often shoulder the costs of training future hairdressers.

Hart said she was concerned about salons disappearing from high streets. “At the rate it’s going we’re not going to have many salons left open and there’s no-one going to be able to do hair,” she said.

Research from the British Beauty Council highlighted hair and beauty businesses’ role in supporting local high streets, encouraging spending and providing opportunities for social connection.

Dorothy Senior has visited M&M Spa for hair and beauty treatments for the past 20 years. She said the salon offered much more than appearances. “Every time I come in I go home feeling so much better,” she said. “It isn’t just having nails and hair done, it’s the whole package.”

For employer-run salons, this week’s Budget will test the BHC’s case that a cut to 10% VAT can sustain hiring and training as self-employed arrangements expand.