Salons could ‘pull down shutters for good’ as business rates bite
The British Beauty Council has urged the government to extend support on business rates to hair and beauty salons, or watch firms up and down the country “pull down their shutters for good”.
Victoria Brownlie, chief policy and sustainability officer at the British Beauty Council, warned that the profitability of beauty salons has been “hollowed out” by spiralling labour costs and utility bills, with looming changes to business rates set to pile further costs on top.
“The British Beauty Council is calling on the Chancellor to recognise that without urgent intervention on business rates, the vibrant salons that define our local economies may soon be forced to pull down their shutters for good,” she said.
The intervention is the latest from the retail and hospitality sector following the government’s attempt to reform business rates, a tax on non-domestic properties.
A firm’s liability is determined by multiplying its ‘rateable value’ – an estimate of what rent the property would fetch if it were let on the open market – with a national multiplier, set by the government.
Although the government reduced the multiplier for most businesses in the Budget, the reassessment of property values – which takes place every three years – more than offset the lower multiplier, because property valuations have increased significantly since the pandemic.
This will leave many retail and hospitality businesses facing significantly higher tax bills from April.
‘Devastating’ cost increases
“Even with the Government’s new Retail, Hospitality, and Leisure multipliers, rising rental values mean the underlying property values have surged, effectively cancelling out any intended tax benefits,” Brownlie said, warning that high-street businesses faced a “devastating spike in fixed costs”.
While the Chancellor announced a £300m support package for pubs in January, she has not extended this support to other parts of the hospitality sector despite intense pressure from the industry.
“This week, we have witnessed the Government’s recent announcement to lend further support to pubs, while leaving salons behind. We argue that our sector provides equal social and economic value,” Brownlie said.
“We urge the Treasury to extend the same level of protection to hair and beauty SMEs as is being considered for pubs,” she added.
Many other sectors have also warned that the looming changes to business rates will have a detrimental impact on business, such as in the music industry.
Representatives from leading recording studios told the Times that some of their members face a 45 per cent increase, which could lead to studios closing and potentially force British artists to record abroad.
The Treasury was contacted for comment. A spokesman has previously said: “We’re backing businesses with a £4.3 billion budget package to cap big bill hikes — stopping bills rising for over half of business properties. This is on top of capping corporation tax at 25 per cent, cutting red tape, and helping deliver six interest rate cuts, boosting businesses.”