Salon Owners Push Chancellor to Cut VAT Ahead of UK Budget

More than 2,000 salon owners in the UK have signed an open letter asking Chancellor John Healey to cut value-added tax on hair and beauty services from 20% to 10% in this week's Budget, according to the BBC. The letter, backed by the British Hair Consortium, cites rising wage, pension and National Insurance costs as pressures pushing traditional salon employers toward self-employed chair-rental models.

How many salon owners signed the letter?

The BBC reported that more than 2,000 salon owners had signed the open letter to the Treasury. One signatory, Marcus Perkins, who has run a hair and beauty salon in Brierley Hill for 22 years, told the BBC he was "scared" about the industry's direction. "Seeing salons close on the high street is very scary," Perkins said. "I'm very scared myself. Luckily it hasn't happened yet but who knows what the future holds?"

What VAT cut are salon owners requesting?

The British Hair Consortium is asking for a reduction in VAT on hair and beauty services from the standard 20% rate to 10%, according to the BBC. The consortium argued that a lower rate would let businesses take on more staff, invest in training, and keep more salons trading on the high street. Perkins said the change would let his business, M&M Spa in Quarry Bank, near Brierley Hill, "grow the business and employ more people."

How many salons are operating in the UK?

The Office for National Statistics counted 50,400 VAT- or PAYE-registered hair and beauty salons in the UK as of March 2025, up from 49,300 in March 2024, the BBC reported. The year-over-year increase in registered salons sits alongside owners' warnings about closures, a pairing the source material does not reconcile. Separately, the British Beauty Council found that hair and beauty salons and shops made up almost a third of all leisure sites across UK retail centers, a share the council said was equivalent to pubs, bars and cafes combined, according to the BBC.

What costs are driving the request?

Salon owners cited increases in wages, pension contributions and employer National Insurance costs as the primary pressures behind the letter, the BBC reported. Ministers have defended the NI changes and minimum-wage increases as part of broader efforts to raise pay, fund public services and support growth. The source material does not quantify the dollar or percentage impact of these specific cost increases on salon margins.

The BBC also noted a structural shift already underway: rather than hiring staff directly, a growing number of salons now rent chairs to self-employed stylists. Industry research cited by the BBC suggested this model offered independence, flexibility and higher earnings for stylists, at a time when salon ownership itself was seen as increasingly out of reach for many in the trade.

What does the Treasury say?

A Treasury spokesperson told the BBC that hair and beauty businesses played an important role in supporting jobs, apprenticeships and high streets, and said the sector had benefited from reforms to business rates. The spokesperson's comment did not address the VAT request directly in the material reviewed.

What is the timeline for the Budget decision?

The open letter and the Treasury's response arrived in the days before this week's Budget announcement, with the BBC's report published the morning of October 26, 2026. The ONS registration figures span the year from March 2024 to March 2025, the most recent period for which the agency had published counts, according to the BBC. Perkins' account spans a longer arc: 22 years operating his salon, during which he said he trained more than a dozen young people, including 21-year-old stylist Trearna Hart. Hart told the BBC that many of her peers struggled to establish careers after leaving college, and that she worried fewer salons would be able to train the next generation if cost pressures continued. No date for the Chancellor's final Budget decision on VAT was specified in the source material.

Whether Healey adopts the 10% rate, keeps VAT at 20%, or offers a different form of relief will determine how the BHC's membership and apprentices like Hart experience the sector's next phase. The BBC's reporting did not indicate when or how the Treasury would formally respond to the letter beyond the general statement on business rates and apprenticeships.