Professional Beauty's #SupportOurSalons campaign is encouraging salon owners affected by the announcements made in the Autumn Budget to ccome together to campaign for support.
The Autumn 2024 Budget has left salon owners dealing with rising costs, putting the future of PAYE-employing and VAT-paying salons, as well as apprenticeship programmes, at risk.
How have the Budget announcements impacted salons so far?
To support the movement to effect change, we asked how the new measures will affect your businesses. Here’s what you had to say...
Lesley Caster, owner of City Retreat, Newcastle: “It will be a difficult time for the hair and beauty industry. Many salons are already facing closure or struggling to invest in essential areas like training, innovation and infrastructure. The challenges ahead are significant.
“For us, it will stunt growth as price increases will be a necessity. This will lead to less uptake of services as prices are deemed high already and our clients may find the cost of our services too high and vote with their feet.
"All of this will result in job losses, less VAT and income tax for the Government and more people forced on to benefits.”
Kathleen Birch, owner of Kathleen Birch, West London: “Luckily I have been trading for many years and have a very stable base and my business is where I want it to be. I would think twice about expanding following this Budget, though.
“This is another nail in the coffin of the beauty industry though. The industry has been changing for some time and I think these measures will stunt growth, especially in terms of salons taking on apprentices.
“However, what I consider more important is proper regulation, which would help the public have more confidence in our industry as a whole and make it clear which treatments are aesthetics and which are skincare. We need to lobby our MPs to support the changes needed.”
Clare Porter, owner of The Fountain Beauty Therapy, Guildford: “The Budget poses significant challenges for my business. The National Insurance changes alone will cost approximately £1,000 per employee annually, adding pressure to our overheads.
"While we already pay above minimum wage, this additional cost means future pay increases will need to be smaller and more tied to performance, which could affect staff morale and ability to retain top talent in the long term. I am particularly concerned about the impact on apprenticeships, an area I’m passionate about.”
Louise Tilden, owner of Louise Tilden Beauty Therapy, Taunton: “My costs will undoubtedly increase. My suppliers, especially those who employ staff, will have to increase their prices to meet the new financial demands imposed on them by the government, which will have a knock-on effect.
"To protect my own margin, I will need to pass this increase onto my customers when it happens.”
Have you already made any changes as a result of the budget announcements?
France Baudet, owner of Cannelle Medispa, Oxford: “As a result of the Budget, I did not replace two members of staff who resigned. Last year had already been very difficult. Consequently, I have now decided to sell the salon.”
Anita Hatch, owner, Anita’s Beauty Works, Eastbourne: “My costs will go up so my low prices will go up, and as I have an older clientele, I will struggle to retain my clients with the loss of fuel allowance and the increased cost of living.”
Clare Porter: “I increased treatment prices to offset rising costs and have locked in fixed rates for utilities and other overheads to minimise exposure to fluctuating expenses.
“As a salon with a team of five, I have also re-evaluated our staffing structure and training plans… We will be limiting our apprenticeship programme to one apprentice at a time.
"This decision was not made lightly, as I am deeply passionate about apprenticeships, but it reflects the reality of tighter margins and rising employment costs.”
Lesley Caster: “We increased prices in January and will implement a further increase in April should this be deemed necessary.”
MP responses to salons
As part of our #SupportOurSalons campaign, Professional Beauty Group has been encouraging salon owners to contact their local MPs to explain the impact of the Budget on the beauty industry, and many of you have!
Clare Porter sent multiple emails to her MPs – the Conservatives’ Jeremy Hunt and Liberal Democrat Zöe Franklin – inviting them to visit her salon and hear firsthand how the beauty industry is being impacted.
“I wanted to ensure they understand the challenges we face, from National Insurance increases to inconsistent industry classifications, which create confusion around grants and local authority support,” says Porter.
Thanks to her tenacity, both MPs visited her salon where she discussed important points like the impact of Covid-19 on the beauty industry and concerns over the decline in apprenticeships and its implications for future skills.
Porter adds: “Zöe visited first – she is a new MP. She had supported some salons during Covid-19 as a local councillor so had a little knowledge of the challenges.
"She did mention that as new MPs they were expressly advised not to overlook the beauty industry and that during her campaign many people approached her about concerns around lack of support for the sector – not just salon owners but also clients, which had surprised her.
“Aside from the HMRC issues, my main points were the fragmented state of the industry – not having a single cohesive voice and the need for regulation or similar to raise standards and professionalism.
“Jeremy Hunt did indicate that for regulation there are historically concerns that it wouldn’t necessarily bring growth, which of course a government would be looking to achieve. He also added that he thought the Home Office would be in support, though.”
Meanwhile, Louise Tilden contacted her local MP Gideon Amos, member of the Liberal Democrats. He replied with a letter, whic said: “Liberal Democrats oppose raising employers’ National Insurance, it is a tax on jobs that will deal a hammer blow to small businesses and struggling care providers.
The Government should raise the money we need by reversing Conservative tax cuts for the big banks or asking the social media giants to pay their fair share.
“We will continue to push the Government to take the measures necessary to protect small businesses. I recently spoke in a debate on business rates to oppose plans to cut the business rate relief on retail, hospitality and leisure.”
What is the #SupportOurSalons campaign?
Professional Beauty, along with our sister title Hairdressers Journal, launched a #SupportOurSalons campaign, dedicated to sharing your stories and supporting the wider industry push to encourage Government to offer relief measures that will help mitigate the increased costs created in the recent Autumn Budget.
Professional Beauty believes that the rise in employer’s National Insurance contributions from 13.8% to 15% (and the scaling back of the threshold from £9,100 to £5,000) will disproportionately hurt the salon sector.
Recent reports, including a study comissioned by the British Hair Consortium and a separate study commissioned by British Beauty Council, plus a report from NHBF, suggest that some salons will be forced to close, while others will cut back staff and apprenticeships – which will have a long-term effect on our industry.
Many in the industry fear that the measures will drive business underground, with a move toward self-employment contracts, which will have a negative effect on HMRC’s revenue.
What action can salon owners take?
We are encouraging beauty professionals to write an email or letter to your MP, explaining how the measures will impact your business and inviting them into your salon to experience just how good your services are.
You can find the name and contact details of your local MP to send it to here on the UK Parliament website.
We have also drafted a template letter which can be downloaded here and can be edited as you wish to reflect your own views and story.
To inform our campaign and support the movement to effect change, we'd also love to hear from you how the Autumn Budget will affect you and your business. Please fill in the quick form below to let us know your story.
Autumn Budget: key points for small business owners
On October 30, Chancellor Rachel Reeves announced the Autumn Budget, which outlines the Labour government's plans.
Opening her speech, Reeves said that the only way to drive economic growth is to ‘invest, invest, invest’.
The budget will see taxes raised by £40 billion pounds across the UK, to invest back into the country’s public services and local councils.
- Employers’ National Insurance contributions will rise from 13.8% to 15%
- The threshold at which businesses start paying National Insurance on a workers' earnings will be lowered from £9,100 to £5,000
- Employment allowance will increase from £5,000 to £10,000
- Employers will be able to claim up to £10,500 on their National Insurance bill, up from the previous £5,000.
- The current 75% discount to business rates - due to expire in April 2025 - will be replaced by a discount of 40% - up to a maximum discount of £110k.
Key points for workers
- Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
- Income tax and National Insurance thresholds will freeze until 2028
What this means for small business owners
The chancellor said that her choice to drop the threshold at which businesses start paying NI contributions will raise £25bn.
The 40% discount on business rates could see business rates nearly double (rather than quadruple based on the previous expiration date in 2025).
To help reduce the effect of these changes on small businesses, Reeves is increasing the employment allowance, meaning that “865,000 employers won’t pay any National Insurance at all next year.”
She also said that over one million employers, as a result of this change, will pay the same or less as they did previously.
The budget also emphasises tax simplification and increased digitalisation, which could benefit salon owners by streamlining tax compliance and potentially reduce the administrative burden that many can find overwhelming.
What this means for workers
This budget stayed in line with the previous Conservative budget on personal tax thresholds, freezing until 2028 to prevent people from being dragged into higher tax bands as their wages rise.
"I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips," said Reeves.
Industry response
Responding to the news, Caroline Larissey, chief executive of the National Hair and Beauty Federation, said:
"We asked the government for support for employers to counteract rising wages so we’re pleased that they have listened and responded with a rise in the Employment Allowance which will benefit some sector businesses, despite the rises to employers National Insurance contributions.
"However, with 16%+ rises in the youth wage rates there was nothing on interim support for businesses training young people. The only ‘youth guarantee’ for our sector will be that small and micro employers won’t be able to afford to take on apprentices.
"This makes it even more vital that Skills England is responsive to the needs of our sector and the new Growth and Skills levy channels major support to incentivise small and micro businesses training apprentices.
"We will engage constructively with the consultation around business rates reform and the decision to keep at least some support through a 40% retail business rates discount and freeze of the small business multiplier is welcome and important in the interim. The government was silent on VAT but we will continue to push for reform which is the sector’s number one issue.
"While the Employment Allowance increase offers some breathing room, the dramatic rise in apprentice wages threatens to disrupt the traditional pathway into our sector. Without targeted intervention, we risk creating a skills gap that could take years to bridge.
"The government's approach to retail business rates shows they're listening, but more comprehensive support is needed to ensure the sustainability of apprenticeships in hair and beauty."
