More than 2,000 salon owners are calling on Chancellor John Healey to cut VAT on hair and beauty services from 20% to 10% in the upcoming Budget. The campaign, backed by the British Hair Consortium, warns that rising wage, pension, and National Insurance costs are crushing traditional high street businesses.
Marcus Perkins and the Financial Pressures Facing Traditional Salons
After running M&M for 22 years, Marcus Perkins finds himself increasingly worried about what lies ahead for the industry. Seeing salons close on the high street is very scary,
he said, according to reporting on the open letter. I’m very scared myself. Luckily it hasn’t happened yet but who knows what the future holds?
Rising operational expenses have squeezed margins across the sector. Business owners point to mandatory minimum wage increases, higher pension contributions, and government changes to employers’ National Insurance (NI) contributions as major cost drivers. Ministers have defended those labor reforms as necessary to improve worker pay and fund public services, but traditional storefronts say the cumulative burden makes it difficult to maintain direct employment models.
Stylists Move to Self-Employment as Training Costs Burden Salons
As traditional salon ownership slips out of reach for many stylists, a growing number of workers are moving into self-employed arrangements, often renting individual chairs within established shops. Industry research indicates that self-employment offers stylists higher immediate earnings, independence, and flexibility.
However, salon owners argue this trend creates an unlevel playing field. While independent chair renters operate with minimal overhead, traditional salons shoulder the heavy financial burden of training the next generation. Perkins reported spending about £2,000 this year alone on courses and travel costs to support staff training.
It’s upsetting really. 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?
Marcus Perkins, salon owner, via BBC
The British Hair Consortium warns that apprenticeship numbers have fallen sharply across the sector. According to a Future of Hairdressing report cited in the coverage, 53% of salon owners have already reduced the number of apprentices they train due to financial strains and concerns over inconsistent standards.
High Street Footprint
Despite the economic headwinds facing employer-run salons, the broader beauty sector remains a major anchor for retail centers. Research from the British Beauty Council highlights that hair and beauty businesses make up nearly a third of all leisure sites across UK retail destinations.
One report noted there were 49,300 VAT or PAYE registered hair and beauty salons in the UK in March 2024. Yet stylists like Trearna Hart fear that fewer traditional storefronts will survive to mentor future talent.
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.
Trearna Hart, via BBC
What Customers and the Treasury Say About the Sector’s Future
The crisis extends beyond business ledgers to affect daily community life. Dorothy Senior, who has visited M&M for hair and beauty treatments for two decades, emphasized that neighborhood salons provide essential social connections alongside personal care.
Every time I come in I go home feeling so much better. It isn’t just having nails and hair done, it’s the whole package.
Dorothy Senior, customer, via BBC
In response to the open letter, a Treasury spokesperson acknowledged that hair and beauty businesses play an important role in supporting jobs, apprenticeships, and thriving high streets, noting that the sector has already benefited from recent business rates reforms. Meanwhile, the British Hair Consortium maintains that cutting VAT to 10% is essential for businesses to expand payrolls, invest in proper training, and keep storefronts open.