Salons Excluded from New 20% Business Rates Cut for High Street Venues

Hair salons are not included in the Government’s newly announced 20% business rates discount, despite renewed industry calls for tax reform to support personal care businesses

Prime Minister Andy Burnham has announced a new 20% reduction in business rates bills for pubs, social clubs and live music venues in England, but the targeted relief does not extend to hairdressers, barbershops, beauty salons or aesthetics clinics.

The measure is due to apply from the 2027/28 financial year and will benefit nearly 32,000 eligible venues, according to the Government. It estimates that the typical pub will save around £1,100 during the year.

The announcement comes days after the National Hair & Beauty Federation (NHBF) urged the new Prime Minister to include hair, beauty, barbering and aesthetics businesses in reforms intended to support high streets.

What is the New 20% Business Rates Cut?

Under the Government’s plans, pubs, social clubs and live music venues will receive an additional 20% reduction in their business rates bills from April 2027.

The package is worth around £100 million a year and will be funded partly through a review of existing reliefs for businesses the Government says do not make a positive contribution to local communities, including vape shops.

The Government also plans to strengthen measures targeting sellers that use online marketplaces but do not meet their UK tax obligations. Revenue raised through these reforms will be reinvested in improvements to the business rates system.

The new discount will not apply to the largest live music venues, with further eligibility details expected at the Budget.

It comes on top of a previously announced 15% relief for pubs and live music venues in 2026/27, followed by a two-year real-terms freeze in their bills.

Are Hair Salons Included in the Business Rates Discount?

Hair salons and other personal care businesses are not among the sectors named as eligible for the new targeted 20% reduction.

This does not necessarily mean that salons will receive no support through the wider business rates system. More than 750,000 retail, hospitality and leisure properties were covered by a permanent 5p reduction in business rates multipliers announced in the Autumn 2025 Budget, while transitional support was introduced for businesses facing higher bills following revaluation.

However, the additional sector-specific discount announced on July 23 is limited to pubs, social clubs and qualifying live music venues.

The decision is likely to increase scrutiny of how the Government defines the high street businesses that provide social and community value.

Announcing the plans, Andy said, “For too long, governments have stood by while cherished venues have disappeared from our local high streets. So today I am changing that.

“This government will back the businesses that people want to see in their communities. I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do. What we’re announcing today is just the start as we work to bring back hope across the country.”

This follows a new campaign launched by Professional Beauty and Hairdressers Journal – "At The Heart Of The Community" – which is designed to help the salon and spa sector loudly demonstrate its vital economic and community value.

The campaign aims to shift the narrative around the industry by loudly celebrating salons and clinics as foundational community anchors, critical drivers of high street footfall and major creators of local employment.

NHBF Calls for Business Rates and VAT Reform for Salons

In an open letter to Andy dated July 20, the NHBF said the hair, beauty, barbering and aesthetics sector was under pressure from the combined cost of VAT, employer National Insurance Contributions, wage increases, business rates, rent, energy, supplies and insurance.

The federation said the sector comprises more than 50,000 VAT and PAYE-registered businesses, supports more than 178,000 people and generates around £6.1 billion in UK turnover.

It argued that salons, barbershops, beauty businesses and aesthetics clinics should be recognised as local employers, training providers, social spaces and services that contribute to high street footfall and their surrounding communities.

The NHBF welcomed Andy's previous comments about reducing business rates for high street businesses and making businesses that deliver social benefits a priority.

However, it called for that principle to be applied across the “whole high street personal care economy”.

In the letter, NHBF president Fiona Johnston wrote, “The first and most urgent step should be a VAT cut. VAT and business rates reform must support the businesses that keep high streets alive.”

The NHBF is asking the Government to introduce a reduced VAT rate of 10% for labour-intensive personal care services, alongside changes to the VAT threshold and wider reform of business rates.

Fiona said, “The NHBF is therefore asking this new Government to bring together business rates reform and VAT reform as part of one high street package: cut the fixed property burden on small high street businesses, reduce the VAT burden on labour-intensive personal care services, and support the compliant employers who are already keeping high streets alive.”

Why Business Rates Matter to Hair Salons

Business rates are charged on most non-domestic properties and can represent a significant fixed cost for salon owners operating from physical premises.

Unlike digital or mobile businesses, high street salons rely on treatment rooms, equipment and client-facing spaces that cannot simply be moved online.

The NHBF has argued that personal care businesses also generate regular visits to town centres, support neighbouring shops and hospitality venues, employ local people and offer apprenticeships and vocational career routes.

Its open letter called for salons and other personal care services to be included in the Government’s forthcoming High Street Strategy, alongside retail, hospitality and leisure businesses.

The Government has said it will return to wider business rates reform, including Small Business Rates Relief, at this year’s Autumn Budget which is expected in late October or early November.

Ireland Introduces Lower VAT Rate for Hairdressers

The UK industry’s calls for tax reform also follow a VAT reduction for hairdressing services in the Republic of Ireland.

From July 1, 2026, the VAT rate applying to Irish hairdressing services fell from 13.5% to 9%. The reduced rate also applies to qualifying restaurant and catering supplies, hot takeaway food and certain drinks.

The Irish measure applies specifically to hairdressing services and does not provide an equivalent reduced VAT rate for beauty treatments.

The Irish Hairdressers Federation had campaigned for the change, presenting it as a measure to improve business viability amid rising wages, energy, insurance and operating costs.

The development provides a current example of a neighbouring government using targeted tax changes to support a labour-intensive personal care sector, although the structure of the Irish VAT system and the scope of the measure differ from the reforms being requested in the UK.

What Happens Next for Salon Business Rates?

The immediate 20% discount will remain limited to the venues specified by the Government unless its scope is changed before implementation.

Further details about eligibility, funding and the treatment of larger venues are expected to be set out at the next Budget.

For hair salon owners, attention will now turn to whether the wider review of business rates and Small Business Rates Relief results in additional support for personal care businesses.

The NHBF is also calling for the Government to develop a combined package covering business rates, VAT, apprenticeships and wider high street policy.

FAQs

Are Hair Salons Included in the New 20% Business Rates Cut?

No. The additional 20% discount announced by the Government applies to eligible pubs, social clubs and live music venues in England. Beauty salons, hairdressers, barbershops and aesthetics clinics are not included in the targeted measure.

When Will the New Business Rates Discount Begin?

The additional 20% reduction is expected to take effect from April 2027, at the start of the 2027/28 financial year.

Can Hair Salons Still Receive Business Rates Relief?

Some salons may qualify for existing support, such as Small Business Rates Relief or other wider business rates measures, depending on their rateable value and circumstances. However, they will not automatically receive the new sector-specific 20% discount.

What Tax Changes is the NHBF Requesting?

The NHBF is calling for wider business rates reform and a reduced VAT rate of 10% for labour-intensive personal care services. It has also asked for changes to the VAT threshold and for personal care businesses to be included in the Government’s wider high street strategy.