“Salons Like Ours Are Being Pushed Into An Impossible Corner”

The Autumn Budget 2025 – your reactions

by AMANDA | INFORM

With the reveal of the Autumn Budget 2025, salons are now facing National Minimum Wage hikes from April, alongside other changes. How will this latest wave of government changes impact your salon business?

Share your views now – the British Hair Consortium are collecting instant responses from salons ahead of a government meeting on 8 December

“With the new budget increasing minimum wage for apprentices, salons like ours are being pushed into an impossible corner. As a hybrid salon, we already juggle rising costs and limited margins and these changes make it even harder to hire and train new talent.

It’s financially unviable to bring apprentices into the industry, putting the future of hands-on learning at real risk. A VAT reduction to 10 per cent is no longer a luxury; it’s essential for our survival. Without it, salons simply won’t be able to absorb these rising costs and the high street will lose yet another vital trade.”

Warren Edwards, Warren & The Hare, Bournemouth

“I’ll be honest, this Budget was disappointing for our industry. Once again, hair and beauty barely earned a mention, despite our contribution to the economy and our role in training thousands of young people. Hospitality was recognised; we weren’t, which leaves me frustrated.

“The biggest issue is that the VAT system continues to favour micro-businesses staying under the £90k threshold. There’s absolutely nothing wrong with self-employment – it’s an important, valuable part of our industry – but the system unintentionally pushes people towards it. An employed stylist in a VAT-registered salon contributes almost three times more tax than a self-employed stylist under the threshold, yet salons offering apprenticeships, training and career progression face the highest operating costs. That imbalance holds back growth.

“The rise in the National Minimum Wage is the right move ethically, but it will stretch salon payrolls further. This is where knowing your KPIs becomes essential. Profitability is basic maths. Align your pricing, wages and service structure to the numbers, and tough decisions become clearer. Sometimes you must remove emotion to make the decision, and put the emotion back in once it’s made.

“I remain optimistic, but we need recognition and fairer reform. Without it, we risk weakening the very salons who train the next generation.”

Lorenzo Colangelo, The Gallery, Tunbridge Wells

“As the owner of a salon who takes on apprentices, the increase in the minimum wage – including for apprentices – means our labour costs are rising sharply at a time when overheads are already tight. This puts real pressure on hair salons, where staffing is a major cost, and it forces us as salon owners to make tough decisions, raise prices, reduce staff or limit how many apprentices I can take on. It’s a difficult balance. I want to support the next generation of stylists, but I also need to keep the business afloat.”

Charlotte O’Flanagan, Charlotte Paints Hair Studio, Shirley

“While headlines focus on minimum wage rises and business support, the reality on the salon floor is quite different. The increase in the National Minimum Wage will cost a salon with five stylists around £5,200 extra per year, and that’s before we factor in any changes affecting apprentices. With margins already incredibly tight across the industry, this level of additional wage pressure will force many salons to make difficult decisions at a time when they are already trying to absorb rising product, energy and rental costs.

Rates relief changes offer a glimmer of hope, but only if the Scottish Government responds with equivalent support. As a Scottish business, we’re watching closely and hoping this Budget puts pressure on Holyrood to deliver tangible relief. Without it, many salons in Scotland will find themselves at a competitive disadvantage.

What’s most concerning is that, despite all the noise, this Budget brings very little meaningful change. With income tax thresholds frozen, many people will actually see their take-home pay decrease as they fall into higher tax brackets. For industries like hairdressing, this is significant. When clients feel the squeeze, discretionary spending is often the first to tighten – and salon visits, colour services and treatments are directly affected.

There was talk of support for apprentices, but the detail is vague and appears to be focused on England. Without clear UK-wide measures, salon owners are left with uncertainty at a time when stability is desperately needed.

Ultimately, this Budget doesn’t reflect the day-to-day challenges facing our industry. Salons are creative hubs, employers of young people, trainers of future talent and vital contributors to local high streets. We needed clarity, fairness and support. Instead we’ve been left with a budget that, in all honesty, feels a little ‘blah’.”

Colin McAndrew, Medusa Hairdressing, Edinburgh

What You Need To Know About The Autumn Budget 2025

Rises to National Minimum Wage rates sees salons further squeezed

by AMANDA | INFORM

Increases to the National Minimum Wage have been revealed in the Autumn Budget, meaning additional pressure for salons across the country.

The NMW rate for 18 to 20-year-olds will go up 8.5 per cent, from £10 to £10.85 per hour. The rate for over-21s will rise 4.1 per cent in April, from £12.21 to £12.71 per hour, as part of a plan to establish a single rate for all adults. Under-18s and apprentices will get 45p more to push the rate to £8 per hour.

The news comes as the Government cracks down on those not paying employees National Minimum Wage, with more regular public naming and shaming of employers breaking the rules. 

The Treasury said the new rates for 2026 struck a balance between “the needs of workers, the affordability for businesses and the opportunities for employment”. Yet the BBC has reported that there is “widespread evidence” that employers have reduced hiring, shared lower pay rises to other workers or raised prices for customers as higher wages push up running costs.

The NMW increases are on top of a 6.7 per cent rise for over-21s and a 16.3 per cent rise for 18 to 20–year–olds respectively in Rachel Reeves’ Autumn Statement last year. That was alongside a 1.2 per cent rise in employer National Insurance Contributions plus a drop in the threshold that businesses start paying them from £9,100 to £5,000. The changes were estimated to cost the hair and beauty industry £139m, according to a report from the NHBF earlier this year.

Elsewhere, income tax and National Insurance thresholds will be frozen until the end of the 2030/31 financial year. Salary-sacrificed pension contributions will be taxed, and tax on dividends increases 2 per cent. The Office for Budget Responsibility (OBR) is predicting inflation will rise higher than initial predictions – 3.5 per cent instead of 3.2 per cent.

“This Budget was far from the ‘fair and necessary’ action our sector urgently needed”
Caroline Larissey, NHBF chief executive

“For small businesses continuing to navigate the current financial climate, the decision to freeze income tax thresholds until the end of 2030/31 offers some certainty for planning and forecasting,” said Lesley Blair MBE, the chief executive of BABTAC and a previous advisor to HM Treasury. “However, the freeze on National Insurance thresholds will effectively increase employer contributions as wages rise with inflation, adding further pressure on already tight margins.”

She added that several other measures announced in the Budget are likely to place additional strain on both employers and employees. “The move to tax salary-sacrificed pension contributions removes a valuable incentive for staff savings and adds another cost consideration for employers. With the OBR forecasting inflation to rise higher than expected, businesses may feel the squeeze on operating costs, while customers themselves face shrinking disposable income. The 2 per cent rise in tax on dividends will particularly affect owner-operators who pay themselves this way. The cumulative impact with National Minimum Wage rises could challenge the commercial viability of many small salons, potentially leading to price increases or reduced staffing.”

Caroline Larissey, chief executive of the NHBF, added that the Budget delivered “little for the small, people-focused businesses at the heart of every high street”. “Hair and beauty is one of the most accessible and empowering routes into work for women, young entrepreneurs and neurodiverse individuals,” she said, “yet this Budget was far from the ‘fair and necessary’ action our sector urgently needed.”

“Our members have been clear: salons and barbershops are already at breaking point following the last round of wage rises and relentless cost pressures,” she added. “Hair and beauty employers have always backed fair pay, but the Chancellor cannot keep loading costs onto small businesses without offering the support needed to keep them trading and providing opportunities in every community.

“If the Government truly wants to grow the economy, end low pay and keep high streets open, today’s wage announcement must be matched with serious support on National Insurance, business rates, skills and enforcement.”