Published
06th Mar 2024
by Eve Oxberry
Chancellor Jeremy Hunt announced the Spring Budget in the House of Commons today (Wednesday, March 6).
The beauty and hair industry's calls for a lower rate of VAT for our service-led market were not answered in this Budget.
However, the announcement included a VAT registration threshold increase, a cut to national insurance by 2p, and an extension on the Government loan scheme for small businesses.
Jeremy Hunt has said the Office for Budget Responsibility expects the economy to grow by 0.8% this year and 1.9% next year – 0.5% higher than the autumn forecast, adding this growth is expected to continue on this trend until 2027.
Key announcements from the 2024 Spring Budget
• The VAT registration threshold will increase from £85,000 to £90,000 from April 1.
• There will be a cut to National Insurance by 2p from April 6.
• An extension on Covid-era Government loan scheme for small businesses until March 2026.
• A continuation of Government funding for those struggling with cost-of-living pressure for another six months.
• UK’s inflation rate to fall below 2% in a few months.
• Increase to child benefit earning threshold.
Beauty industry reaction to the Spring Budget 2024
Caroline Larissey, chief executive at the National Hair & Beauty Federation said:
"We’re pleased...with the raising of the VAT threshold, taking into account inflation. However, there’s more to do. We welcome further discussions with HM Treasury around future VAT reform to ensure a fairer system and to help level the playing field in the hair and beauty sector, including options for reduced rates and tiered rates around the threshold.
She continued: "However, the silence was deafening on support for apprentices. National Insurance (NI) cuts will benefit the self-employed but where is the support for employers?
"With wages rising in April, few small and micro sector businesses can afford to take on staff and apprentices and grow the sector. We call on the government to support these businesses, largely female entrepreneurs, bolstering the high street and championing wellbeing in the community."
Babtac and Cibtac chief executive Lesley Blair MBE added, “The ongoing cost-of-living crisis has affected everyone and remains a huge concern for many beauty businesses. We’re hopeful that this budget will offer some relief, welcoming in particular the increase to the VAT threshold, given our ongoing appeals to government for VAT reform for our sector.
She continued, “However, as one of the hardest hit industries during and post-pandemic (estimated to be an average financial loss of £11,603 on earnings), we believe far more needs to be done to encourage the emergence of new talent and growth in our sector.
She continued, “However, as one of the hardest hit industries during and post-pandemic (estimated to be an average financial loss of £11,603 on earnings), we believe far more needs to be done to encourage the emergence of new talent and growth in our sector.
"Not only are we a proven leading contributor to UK economy, but also a sector unique in our ability to improve the wellbeing of society, while supporting the revival of the British high street. We believe more support should therefore be forthcoming and will continue to liaise with government to secure this.”
