For an industry synonymous with creativity, community and connection, with a thriving media presence, the vibrant culture of salons lies at a fragile crossroad. Is there a way to resolve the sustained decline that we’ve experienced for over a decade?

As a result of the varying challenges facing salons, and in order to future proof the hairdressing community, in 2024, the British Beauty Council commissioned Thinks Insight & Strategy, a global insights consultancy, to develop, by way of consultation with industry itself, a series of recommendations that could solve some of the integral and systematic challenges.

These include:

1. Reforming the VAT system would provide much-needed relief to salons. More widely, a re-evaluation by the Government of existing business support is required to ensure employment is not disincentivised. Current legislative and financial incentive structures mean that self-employment is likely to continue to grow. At the same time, salons are still recognised as important places of learning and creativity. This may mean a proliferation of hybrid models, which employers need clear guidance on.
2. Standardisation of the industry without losing sight of accessibility and inclusivity. Those in the industry value that it is accessible, meritocratic and offers varied career paths. However, they recognise the need for greater standardisation, such as through regulated qualifications, to protect consumers and to improve the industry’s reputation, ensuring that it is recognised as the skilled profession that it is.
3. Training and support that recognises the multi-faceted nature of hairdressing. Each day, hairdressers take on multiple roles: from stylists and businesspeople to therapists, influencers and artists. Beyond technical education, there is demand for business, marketing and communication training as standard, setting young people up for success and allowing professionals to continue to grow and feel empowered in their careers.
4. The industry should promote and celebrate visions of success that reflect the different ways that the sector operates today. Many hairdressers feel that the only way to truly progress in their careers is through self-employment or business ownership. However, there are also salon models that are successfully growing and retaining employees by rewarding performance. Both, if done legitimately, should be welcomed.

The Council has undertaken and funded a number of reports over recent years, including Taxing Beauty, looking into the cost implications and cumulative impact of recent Budgets and government policy announcements. More widely, other organisations and campaign groups have also commissioned research and data to explore the state of play and possible solutions to the challenges that seem to be unique to the hairdressing sector.

Each of the reports surmise that the challenges facing hairdressing are acute. Rising costs are suffocating businesses across the UK. Salon owners are struggling with the cumulative impact of increases to business rates, rent, utility bills, wages, NICs, apprentices and product costs, leaving many operating on razor-thin margins. 90% of salon owners surveyed as part of the Things Insights & Strategy recommendations identified overheads as their most significant challenge.

Since the Council’s #CHOPTHEVAT campaign back in 2020, we have spotlighted how ill-suited the current VAT system is to labour-intensive industries like hairdressing. Unlike other businesses, salons cannot reclaim VAT on their primary expense – wages. This creates a significant financial disparity that, since 2009, has already cost the sector an estimated £2.4 billion in lost VAT receipts, according to a CBI Economics report commissioned by the British Hair Consortium.

The 2024 Budget saw the increase in Employer National Insurance. Coupled with steep, consistent above-inflation rises in the minimum wage—especially the youth rate—this was forecasted to leave the professional services sector facing an over £190 million annual increase in staff costs, equivalent to approximately 9,500 jobs.

The 2025 Budget further compounded the growing overheads for struggling salons. Wage pressures were exacerbated by a 4.1% rise in the National Living Wage and the freeze on Income Tax and National Insurance Contributions thresholds, which dragged more people into paying tax, indirectly forcing salon employers to respond with gross wage increases.

Self-employed hairstylists, beauty therapists and salon owners were also hit with a 2 percentage point increase in the tax on dividend income, which many of them rely on as their primary income source. Finally, while many salons saw their business rates multiplier lowered, this coincided with sharply rising property valuations, leaving many with chunky rates rises.

Rising costs have resulted in the talent pipeline being under severe strain. Apprenticeships, once the cornerstone of the industry, are seeing a sharp decline in completion rates, as salons reduce training programmes to cut costs and young people find the environment and wage structure challenging in today’s economic climate. Without a steady influx of skilled professionals, the industry risks stagnating and losing its renowned artistry and innovation.

Announcements on the Youth Guarantee offer hope of reversing this decline in hairdressing apprenticeships. The Government is allocating a £1 billion fund to help more young people into education, employment and training. While new policies under the Youth Guarantee continue being unveiled, the Government has already promised flagship measures, such as the £3000 Youth Jobs Grant, the Jobs Guarantee and a £2000 incentive for SME employers taking on new apprentices aged 16-24.

In the upcoming 2026 Budget, we expect to see further movement on business rates, after significant campaigning by the Council to extend the 20% business rates relief for pubs to beauty businesses on the high street. Business rates support would go a long way to helping salons manage increasing overheads. We also expect further support for employers via the Youth Guarantee, which will hopefully remedy the trends towards self-employment and collapsing apprenticeship rates in the hairdressing sector.

All of this matters because the hairdressing industry is more than a collection of businesses – it is a vital part of the UK’s social and economic fabric. Salons contribute billions of pounds to the economy annually (professional services as a totality directly contributed £5.7 billion in 2025) and provide flexible, accessible employment opportunities, which are a great vehicle for alleviating our NEET crisis (those not in employment, education or training) and getting young people into work. Salons also serve as community hubs where confidence and connection are nurtured, making up 20% of all leisure and recreation amenities on British high streets.

Moreover, hairdressing plays a crucial role in supporting women’s employment and entrepreneurship, with a majority of salon owners (86%) and employees (81%) being women. To allow this sector to falter would be to lose not only an economic asset but also a space of cultural significance and personal empowerment.

The resilience of the hairdressing industry is undeniable. Stylists and salon owners are innovating every day – adopting hybrid models, leveraging digital platforms and finding new ways to engage clients. However, they should not have to navigate these challenges without adequate support.

At the British Beauty Council, we see the immense potential of this industry and are committed to advocating for the reforms it desperately needs. Changes to taxation, investment and training and professional standardisation are not merely desirable; they are essential for the survival and prosperity of hairdressing.

We will continue to engage with policymakers to recognise the value of hairdressing to the British economy and society and provide the structural support required to ensure its sustainability. Hairdressing has always been about transformation, and now is the time to transform the industry itself – securing its place as a vital and thriving part of our collective future.