The ugly truth: Business rates are bad for the beauty industry
Salons are grappling with the simultaneous rise of the National Living Wage, increased Employer National Insurance contributions, and skyrocketing utility costs. They should be given the same consideration as pubs, says Victoria Brownlie
The British high street is often described as the heartbeat of our communities, and for years, the hair and beauty sector has been its steady pulse. As a sector consistently in the top-three most prevalent businesses on the high street, our salons drive the essential footfall that keeps neighbouring businesses alive. Yet, as we look toward April, that pulse is weakening.
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.
The current situation is a “perfect storm” of cumulative financial burdens. While client numbers remain positive, the profitability of these businesses has been hollowed out. Salons are grappling with the simultaneous rise of the National Living Wage, increased Employer National Insurance contributions, and skyrocketing utility costs. Unlike other industries, hair and beauty is a highly labour-intensive, service-based sector. We cannot automate a haircut or a facial; our value lies in our 266,000 workers, the majority of whom are women and small business owners.
Perfect storm
For years, the 75 per cent Retail, Hospitality, and Leisure (RHL) relief was the primary lifeline that kept salons solvent. The reduction of this relief to 40 per cent in 2025, followed by the upcoming 2026 revaluation, has created a devastating spike in fixed costs. Even with the government’s new RHL multipliers, rising rental values mean the underlying property values have surged, effectively cancelling out any intended tax benefits.
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. A salon is more than a business; it is a hub of community cohesion and a vital employer.
The consequences of inaction are quantifiable. Oxford Economics previously estimated a loss of approximately 20,000 jobs due to 2024 budget pressures; with these new business rate changes, that number could climb significantly higher. Furthermore, as margins disappear, we risk a mass exodus from the “employment model” toward less regulated, self-employed structures, ultimately reducing the corporation tax and labour tax revenue flowing to the Exchequer.
We urge the Treasury to extend the same level of protection to hair and beauty SMEs as is being considered for pubs
We urge the Treasury to extend the same level of protection to hair and beauty SMEs as is being considered for pubs. We must ensure that the 2026 revaluations align with the actual profitability of today’s high-street providers, rather than post-pandemic market shifts that no longer reflect reality.
The beauty industry is essential to the British economy. We are ready to work with the government to ensure its growth, but first, we need a fair deal that reflects our value.
Victoria Brownlie MBE is chief policy & sustainability officer at the British Beauty Council