Beauty industry warns of 'tax burden' ahead of budget

Oct 30, 2024

A hair and beauty salon owner from the West Midlands is warning possible tax increases in Labour's first Budget could have a disastrous impact on an already struggling industry.

Marcus Perkins, from M&M Spa in Brierley Hill, is hoping the budget will address what the Salon Employers Association (SEA) says is an "unequal tax burden" placed on VAT-registered salons.

He said: "I’m very concerned, people in my industry are coming together and speaking to each other, because we aren’t too sure if we’re going to be hammered, and we always are."

Prime Minister Sir Keir Starmer said tax rises were needed "to prevent austerity and rebuild public services".

The SEA is calling for urgent reform as high street salons say they are struggling to stay afloat under heavy tax obligations.

They say that the current rules allow small operators to avoid VAT altogether, creating an unbalanced system that disadvantages larger, VAT-paying salons.

Another concern for the sector is the gradual decline in people taking up apprenticeships.

According to the National Hair and Beauty Federation the number has fallen by 19% since 2021.

Mr Perkins is hopeful for more action from the new government.

He said: “It’s my livelihood, I pay a mortgage, it’s very concerning because I employ people.

"We need help, a conversation to show them how the business model works, to explain to them what we do as a community run salon to show them we are needed on the high street.

“All the leading salons who employ people are finding it hard to maintain staff.

“Because you can invest three to four thousand pounds on training, for them to then leave.

"We need help, if new hair dressers are not coming through our hair dresser sector will die”

Labour's first Budget for 14 years will be delivered by Chancellor Rachel Reeves on Wednesday 30 October. She has warned that it will involve "difficult decisions".

Government sources have told the BBC the Budget could include tax rises and spending cuts to the value of £40bn.

Speaking on Monday, Sir Keir Starmer said the government would take "tough decisions", suggesting he would raise taxes "to prevent austerity and rebuild public services".

"Nobody wants higher taxes, just like nobody wants public spending cuts," he said.

"But we have to be realistic about where we are as a country.

"This is not 1997, when the economy was decent but public services were on their knees.

"And it’s not 2010, where public services were strong, but the public finances were weak. We have to deal with both sides of that coin."

Meanwhile, a Department for Education spokesperson said it was "high-time" apprenticeships and skills training was "taken seriously".

They said: "We will unlock opportunities for our young people to harness their talents and grow our economy."

They added: "We will work with businesses, unions, mayors and training providers to find and fill skills gaps across our country.”

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