Hair and beauty salons press for 10% VAT cut before Budget
Hair and beauty salons are urging the Chancellor to cut VAT to 10% in the Budget, warning that the 20% rate is pushing staff into self-employment and hitting apprenticeships.
The Full Story
A plain summary built from the channels that reported this story.
Thousands of hair and beauty salons are calling on the Chancellor to cut VAT from 20% to 10% in the upcoming Budget, arguing that the current tax burden is holding back growth and hiring. The Budget is due on 28 October, and the sector is making its case alongside other business groups. The Hairdressers Gazette reported that the hair industry is uniting behind a 10% VAT call.
The industry says salons are labour-intensive and are hit harder by VAT than many other high street businesses. Any business with taxable turnover above £90,000 must pay VAT at 20%. Salons argue that this encourages staff to work as self-employed people who rent a chair, work from home, or operate as micro-businesses to stay below the threshold. That reduces the tax burden for those individuals but leaves employed salons facing higher costs and an uneven playing field.
The Salon Employers Association says hair and beauty is the hardest hit business on the high street. It points to employment falling by 22% last year and warns that without an emergency VAT cut there will be fewer employers and apprenticeships. The British Hair Consortium says more than 20,000 employed staff were lost last year, while the number of self-employed people rose over the same period. The industry also says apprentice numbers have fallen because of higher trainee costs.
The group gave an example of two salons with £400,000 turnover. One employs five people and pays £105,000 in tax, it said. The other uses five self-employed micro-businesses and pays £47,000. The businesses look identical, according to the industry, but trade in very different tax environments. Reducing VAT to 10% would encourage salons to hire and grow, the group argues.
The sector also claims the government has made a special case for pubs while salons face similar pressures. A Treasury spokesperson said hair and beauty businesses play an important role in jobs, apprenticeships and thriving high streets, and said salons had benefited from reform to business rates. The government said decisions on tax are for the Chancellor to set out at fiscal events, rather than commenting on rumour, speculation or proposals.
In political debate, a Labour representative said hairdressers are thriving businesses on the high street and that the government is supporting small and medium-sized firms. They cited a £3,000 payment for each young apprentice a business takes on and measures to cap rising bills, but said they could not set out what the Chancellor will do in the Budget. A Conservative representative said the high street needs a mixed economy and that his party would scrap business rates for most high street businesses and reduce National Insurance contributions for young people. Another guest said a VAT cut was a good idea but questioned affordability, estimating that a significant cut for small businesses would cost £40bn to £50bn.
The Salon Employers Association also criticised the Chancellor for meeting large companies without small and medium-sized businesses in the room. The Treasury has not accepted the case for a VAT cut. The decision will be made at the Budget.
On screen
Stills are sampled automatically at 60-second intervals. Where shown, the still is the nearest available frame from the relevant broadcast segment and is included to show what was on screen during that part of the broadcast. A still may not correspond to the exact second of a quoted phrase.
Key Claims
Claims reported during this story's coverage, grouped by how many channels reported each one. Select a dot to see the source excerpt.
| Claim |  |  |
|---|---|---|
| Reported by all 2 channels | ||
| Industry bodies reported a fall in salon sector employment last year, with one citing more than 20,000 staff lost and a rise in self-employment, and another a 22% decline. | Reported by BBC One | |
| Only on one channel | ||
| A guest estimated that a significant small business VAT cut would cost £40bn to £50bn. | Not reported by BBC One | |
| Businesses with taxable turnover above £90,000 a year generally pay VAT at 20%. | Not reported by BBC Two | |
| The government stated that tax decisions are a matter for the Chancellor at fiscal events. | Reported by BBC One | Not reported by BBC Two |
| The industry said workers can remain below the £90,000 VAT threshold to avoid VAT. | Not reported by BBC One | |
| Thousands of hair and beauty salons called on the government to cut VAT to 10%, arguing it would help them grow and hire more staff. | Not reported by BBC Two | |
Channel Perspectives
What each channel focused on, with key quotes.
This report treated the story as a pre-Budget business case, explaining the 20% VAT rate, the £90,000 threshold and the industry's claim that the tax pushes staff into self-employment. It gave space to British Hair Consortium figures on falling employed staff and apprentice numbers, then included the Treasury's response. It was explanatory and avoided a studio political debate.
- “A lot of employed-based models like ourselves are looking to switch to a self-employed model so that they can avoid the VAT, pension contributions, et cetera, et cetera.”
- “Figures from the industry body, the British Hair Consortium, suggest a decline of more than 20,000 employed staff last year, whereas the number of people registering as self-employed increased in the same period.”
- “decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation, or these proposals.”
This was a studio debate that put the VAT demand to the Salon Employers Association and political guests. It focused on the uneven tax treatment of employed salons and chair-renting self-employed workers, the cost of a VAT cut and whether the Budget should help the sector. It included Labour and Conservative responses and criticism that the Chancellor had met large companies but not SMEs.
- “Because we're the hardest hit business on the high street.”
- “Without an emergency cut to VAT, which every administration over the last few years has proven they can do, you'll have no hospitality businesses and you'll have no hair and beauty businesses that employ.”
- “400,000 pounds in this one, employing five people, 400,000 pounds in this one with five micro businesses that have chosen to desegregate. This one pays 105,000 in tax. This one pays 47,000 in tax. They look identical.”
Broadcast Timeline
News broadcasts tracked for this story, in time order.