On Wednesday 30 October 2024, Chancellor Rachel Reeves announced the Autumn Budget in the House of Commons.
Hairdressers Journal International has seen just how dramatically the Autumn 2024 Budget has affected hairdressers and the personal services sector. From the increase in National Insurance Contributions, to the impact the Budget will have on apprenticeships, the changes will be felt deeply.
We are launching a #SupportOurSalons campaign, dedicated to sharing your stories, as well as reporting on the changes. Join our campaign to get your voice heard.
HJ believes that the rise in National Insurance (and scaling back the allowance to £5k) is disproportionately hurting the salon sector. Surveys suggest that some salons will be forced to close, while others will cut back staff and apprenticeships – which will have a long-term effect on our industry. The measure will drive business underground, with people potentially using self-employment contracts which will have a negative effect on HMRC’s revenue. We want the government to mitigate this rise and help the salon sector.
Join our campaign and write to your MP. Why not write an email or letter to your MP and invite them into your salon to experience just how amazing our sector is?
Head to this link to find your MP.
To help you get started, we've drafted an email for you to adapt. Keep scrolling to the end of the article to see the draft.
Shock Survey Findings
In October, a survey carried out by the British Hair Consortium* found that...
95% of those that employ apprentices said that they will reduce the number of apprentices they have, not take on any more apprentices or already have made apprentices redundant.
94% are either extremely concerned for the future or believe a generation of apprentices will be lost.
98% of respondents do not believe our sector is valued by the government.
80% of respondents are considering switching to self-employment (even if it isn't lawful) but feel forced to do so in order to survive.
We'd love to hear from YOU. Fill out this form to have your say on how the Autumn Budget will affect you and your business.
Autumn Budget 2024: The Key Facts
A breakdown of the key factors that will impact hairdressers and the hair industry.
Keep scrolling to see the rest of the industry's reaction to today's Budget...
Minimum Wage Increase
The government has announced a rise in the minimum wage from April 2025 with the following new rates:
National Living Wage (21 and over): £12.21 per hour
18-20 year olds: £10.00 per hour
16-17 year olds: £7.55 per hour
Apprentices: £7.55 per hour.
National Insurance (NI) Freeze for Employees
The Chancellor has committed to not raising NI rates for employees, but this freeze does not apply to employers. Employers’ National Insurance contributions will rise from 13.8% to 15%. The threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000. The Employment Allowance will increase from £5,000 to £10,500, which the chancellor says will mean 865,000 employers won’t pay any National Insurance at all next year.
Tax Simplification and Digitalisation
This could benefit hairdressers by streamlining tax compliance and potentially reducing admin.
Business Rates Relief Decrease
The 75% relief for eligible RHL properties is reduced to 40% for 2025-26, with a maximum discount of £110,000.
Corporation Tax Capped
Corporation Tax will stay capped at 25% and VAT rates are not anticipated to change.
The Industry's Reaction
Toby Dicker, founder of the Salon Employers Association
"The increase in labour costs will impact businesses by tens of thousands. Hairdressing businesses are affected five times more than other businesses because of the way we operate. This is the worst thing that has happened to our industry. Governments have been misinformed about our industry for a long time and they aren't listening."
Clive Collins, HOB Salons
"We’ve seen a 6.7% increase to NMW and an unbelievable 16% to under 20's and Apprentices. In real terms, with the increase in ERNI that will be charged because the threshold will not change, this is a 9% increase for those over 21. The 1.2% increase in employers NI will cost us as a business an increase of £50,000. Overall a disastrous budget for small businesses."
Noel Halligan, NOCO Hair Bristol
"Overall it isn’t great: National Insurance on a workers' earnings will be lowered from £9,100 to £5,000, so it feels like small businesses just won’t be able to employ as many people. Retail leisure and hospitality will receive 40% business rates relief which is ok but not sure that will save some salons."
Benjamin Shipman, The Hair Movement, Sidcup
"As a business owner, I found the 2024 budget completely off-balance and can’t see how it will stimulate the economy. The 1.2% increase in employers’ National Insurance and changes to the threshold, aimed at raising an extra £25 billion, just add more hoops for salons trying to bring new talent on board. This may nudge more of the industry towards rent-a-chair models and self-employment—which isn’t necessarily a bad thing, but it’s a reality the industry will need to adapt to and fully embrace.
There are, of course, knock-on effects. The £40 billion tax hike will likely impact consumer confidence, just as many salons were finally seeing clients return to a 6–8-week appointment cycle. Now, I wouldn’t be surprised if we go back to a more cautious 8–12 weeks—or, in some cases, lost clients altogether. Over the next 12 months, salons will need to step up their game to attract new guests to fill these gaps."
Caroline Larissey, Chief Executive of the National Hair & Beauty Federation
"We’re pleased that there will be a rise in the Employment Allowance which will benefit some sector businesses, despite the rises to employers National Insurance contributions. However, with 16%+ rises in the youth wage rates there was nothing on interim support for businesses training young people. The only ‘youth guarantee’ for our sector will be that small and micro employers won’t be able to afford to take on apprentices. It’s vital that the new Growth & Skills levy channels major support to incentivise training apprentices."
Letter Template to Write to Your MP
Att: [Insert MP’s name here]
Dear [First Name],
I’m writing as your constituent to express my concern over the Government’s announcement to raise employers’ National Insurance as well as reduce threshold of when NI is paid.
Salaries and employment costs account for 50% of the total costs of running my business and so the rise in National Insurance imposes a much higher burden on my salon than many other businesses.
We offer labour intensive touch based treatments which we cannot automate. The impact of the National Insurance rise means I am seriously considering a reduction in staff numbers. The cost impact also means that I will no longer be able to afford to take on an apprentice.
I understand that Government finances are under pressure and Government needs to raise money but if there is anything that could be done to help the salon sector, I know you’d have huge gratitude from tens of thousands of small business owners.
It must be tough being an MP; being asked for help all the time and no doubt moaned at by many. I’d very much like you to come in for a complimentary treatment so you and experience first-hand just how good our hair (or beauty) services are. I promise you a warm welcome and a great treatment. Please give me a call on [insert your number] or message me on x
Looking forward to seeing you in our salon soon
Best regards
Your name & contact details