Salon owners urge Chancellor John Healey to halve VAT to 10%

Salon owners have signed an open letter urging Chancellor John Healey to halve VAT on hair and beauty services from 20 percent to 10 percent in this week’s Budget, with more than 2,000 proprietors joining the appeal.

The request comes as rising costs squeeze traditional salon models. Owners say higher wages, pension contributions and National Insurance, together with a recent minimum‑wage rise, are eroding profit margins. Many salons are turning to self‑employment arrangements, renting chairs to stylists rather than employing them directly, to stay afloat. Industry groups such as the British Hair Consortium argue that the shift threatens apprenticeships and the ability of high‑street salons to hire staff.

Marcus Perkins, who has run M&M Spa in Quarry Bank for 22 years, says the pressure is personal. He fears more closures on the high street and worries about the future of his business and the apprentices he has trained. “If VAT is cut we can grow the business and employ more people,” he told the BBC. The sector’s importance is reflected in recent data: the British Beauty Council reports that hair and beauty outlets now make up almost a third of leisure sites in UK retail centres, matching the combined footprint of pubs, bars and cafés. The Office for National Statistics recorded 50,400 VAT‑ or PAYE‑registered salons in March 2025, up from 49,300 a year earlier, but owners say growth is fragile.

The Treasury acknowledges the sector’s role in supporting jobs and apprenticeships and notes that recent business‑rates reforms have helped. Ministers also point to broader tax‑cut proposals, such as eliminating “pointless paperwork” that could save businesses up to £800 million. If the VAT reduction is approved, the British Hair Consortium says salons could hire more staff, invest in training and keep more locations open on the high street, preserving both jobs and consumer choice. The decision will be watched closely by a industry that sees its survival tied to fiscal policy as much as to consumer trends.