British Hair Salon Employment Expected to Drop 93 Percent by 2030
British hairdressers are facing economic hardship and are calling for government support to lower salon VAT (Value Added Tax) rates from 20 percent to 10 percent. Without the government’s help, some salon owners warn of potential closures and a significant decline in apprenticeships which could ultimately lead to salon employment across the industry to drop 93 percent by 2030.
Ahead, we’re breaking down all of the challenges UK-based hairstylists and salon owners are facing and what the government can do to help the industry.
How do high VAT rates affect UK salons?
VAT is a tax added to most products and services sold by VAT-registered businesses. UK businesses have to register for VAT if their VAT-taxable turnover is more than £90,000 a year. Most UK businesses have to charge and pay the standard 20 percent VAT rate.
Many UK salons are struggling with the 20 percent VAT rate and are calling for a reduction to 10 percent (the set rate for salons in other European countries). Salon owners and independent hairstylists argue that because their business is a labor-intensive, service-based and they don’t sell goods, it is harder to pay the high rate.
This structure has created an economic disparity where small, independent salons must charge significantly more for services compared to freelancers or self-employed stylists who often operate under the VAT threshold. As a result, traditional salons struggle to compete, losing both clients and stylists to a growing sector of independent workers who do not face the same tax obligations.
How the Rise of Chair Renting is Affecting UK Salons:
As the traditional commission salon structure is changing and many salons are adopting a chair rental-only business design, this forces stylists to become self-employed stylists which reduces traditional employment benefits and increases expenses. This shift also means fewer salons are hiring employees, leading to a drastic decline in official employment numbers.
How Increased Costs Have Lead to Less Profits:
Increased business rates, energy costs, product costs and overall cost-of-living are making it harder for salons to stay profitable. The cost-of-living crisis means clients are stretching out time between appointments or opting to do their own hair using new at-home hairdressing tools and innovations. Rising costs and loss of business have lead to some salons closing, downsizing and ultimately contributing to job losses.
What Hair Apprenticeship Decline Means for the Industry:
The growth and expansion of the UK hair industry relies heavily on its government-funded apprenticeship programs. UK hair apprenticeships involve paid in-salon, hands-on training coupled with classroom learning.
As more and more salons close and the government reduces its funding toward apprenticeship programs, fewer people are entering the hair industry. This lack of new talent could continue to contribute to the shift to self-employed stylists and a decline in traditional salon employees.
Here’s What the Government Can do to Help:
On Monday, March 17, 2025, the British Hair Consortium; an organization designed to better the lives of UK hairstylists, organized a gathering of hundreds of hairstylists in London to march in front of parliament encouraging their support and asking for tax deductions.
This is an ongoing story and we will update this space as information becomes available. For more information on the BHC’s mission and to stay up-to-date on the UK government’s response, visit bhc.org. uk.
