Salon Owners Urge Budget VAT Cut Amid Rising Employment Pressures

By The Financial Edition · 26 October 2026 · 08:47 GMT · BBC Business · 1 min read

Photograph: Diego Delso, delso.photo · CC BY-SA · sector illustration, not event evidence

Call for VAT Reduction

According to BBC reporting, more than 2,000 salon owners have signed an open letter asking Chancellor John Healey to reduce VAT on hair and beauty services from 20% to 10% in the upcoming Budget. The British Hair Consortium (BHC) backs the letter, warning that increasing operational costs are placing heavy burdens on traditional salon employers.

Impact on Staffing and Training

BBC's reporting details how salon operators like Marcus Perkins, who runs M&M Spa in Quarry Bank, face mounting financial pressures from rising wages, pensions, and National Insurance contributions. Perkins and the BHC state that these costs hinder businesses from employing staff and investing in apprenticeships, creating an uneven playing field against self-employed chair-rental models.

Government Response

BBC notes that a Treasury spokesperson stated the hair and beauty sector plays an important role in supporting jobs and high streets, adding that businesses have benefited from business rates reforms. Meanwhile, ministers have defended changes to employer National Insurance and minimum wage increases as measures to improve pay and economic growth.

Jargon, explained.

National Insurance: UK contributions paid by workers and employers to help fund state benefits and services. It is not a commercial insurance policy.
VAT: Value Added Tax — a tax added to the sale price of most goods and services.

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