Last week, the Chancellor delivered his Autumn Statement 2023. Here’s everything you need to know about how the measures will affect the beauty industry…

The Chancellor of the Exchequer’s Autumn Statement was delivered on November 22, giving an update on the current UK economy and what the public and businesses  can expect next. With a general election nearing, there was significant attention placed upon Chancellor Jeremy Hunt’s announcement, with much speculation in the run up as to what would be included. 

Prior to the Autumn Statement 2023, the British Beauty Council called on the government to address various areas of policy in order to improve the beauty industry. The recommendations included: 

• VAT reform 
• The extension of 75% business rate relief for the beauty industry 
• A crackdown on late payments 
• Green grants and initiatives to help businesses reduce their environmental impact
• Further incentives to train and up-skill the workforce
• The reintroduction of tax-free shopping for overseas visitors
• Tax incentives to grow and develop UK manufacturing 

The Chancellor announced several measures that address these demands and introduce potentially positive changes for the industry. They include:

• A cut in employee National Insurance contributions from 12% to 10% from 6th January 2024
• An extension of the 75% business rate relief for businesses on the high street and a freeze in the small business multiplier for business rates
• The abolition of Class 2 National Insurance Contributions and a reduction of Class 4 National Insurance contributions from 9% to 8% for the self-employed
• An increase in the Living Wage to £11.44ph from April 2024 for those aged 21 years+ 
• Further crackdowns on late payments preventing larger businesses from seeking government contracts if they fail to pay other businesses on time
• Full expensing to be made permanent on new business equipment, giving 25p cash back for every £1 invested 
• A two year £50m investment plan for apprenticeships
• The introduction of new investment zones across the East and West Midlands, Greater Manchester, Wrexham and Fincham 

Prior to the announcement, the Council joined a number of hospitality, retail and leisure bodies in calling for a continuation of the 75% business rate relief, as well as a freeze in the small business multiplier. 

As an industry of 95% small and micro-business owners, of which business rates are a huge barrier to growth, the Council made the case that high business rates inhibit business development and stall investments that would otherwise boost productivity. The organisation also highlighted the importance of targeting support where it will have the strongest impact for SMEs.

Speaking after the Budget, CEO of the British Beauty Council, Millie Kendall OBE, commented: ‘The British Beauty Council welcomes any increased efforts by the Government that enable our sector’s workers to take home more of what they earn. Given that the beauty industry’s self-employment rate is 37% above the economy average, the changes to Class 2 and 4 NICs will greatly benefit workers. 

‘What’s more, despite being an industry that has shown strong resilience and growth, the beauty industry has struggled to meet the needs of business because of the costs of employing people. We hope the measures announced will help to ease this burden and encourage greater investment into business and people.’

Following the Autumn Statement, the Council has engaged with the Department for Business and Trade regarding the Chancellor’s 110 announced measures. The organisation understands that whilst hair and beauty services apprenticeships may not be included in the £50m two year investment into apprenticeships, STEM apprenticeships in areas across research, innovation, science and technology are likely to be. Further details are expected to follow in the coming months.