Beauty Industry Urges for Targeted Government Support
In light of recent challenges faced by the hair and beauty sector, including high inflation and low economic growth, the NHBF has urged the government to target support to ensure the sector's growth and prosperity.
The NHBF has written to the Chancellor ahead of the Autumn Statement on 22 November and calls upon the government to take urgent action in alignment with the six sector priorities outlined below:
Renewed Support on Business Rates: Urging a renewal of the 75% Retail discount for 2024-25, coupled with a freeze in the business rates multiplier, to ensure stability and facilitate effective cashflow and debt management for businesses.
Targeted Energy Support Through the Winter: Advocating for increased flexibility in payment plans, enhanced customer service, and additional green incentives to reduce energy costs and support businesses during challenging times.
Minimizing Additional Burdens on Business: Encouraging restraint in the rise of the National Minimum Wage and National Living Wage, taking into account business survival and employment capacity.
Developing the Next Generation of Talent: Proposing the redistribution of unspent funds from the Apprenticeship Levy to incentivize businesses to hire apprentices and bridge the financial gap for employers, ensuring the sector can nurture talent.
Urgent Review of VAT Threshold: Calling for an urgent review of the VAT threshold to remove disincentives for small businesses, considering options such as raising the threshold or introducing tiered rates for the smallest businesses to facilitate growth.
Promoting Sector Tax Compliance: Collaborating with HMRC to crack down on informal businesses operating on a cash basis, ensuring compliance with tax regulations and promoting fair competition among businesses.
Caroline Larissey, NHBF chief executive says: "We are at a critical juncture for the hair and beauty industry, and the support outlined in our priorities is essential to ensure its sustained growth and resilience. The hair and beauty sector, with its diverse entrepreneurs and skilled professionals, is a cornerstone of the UK and local economy. We urge the government to consider our outlined priorities, as they are vital steps toward empowering businesses, nurturing talent, and promoting financial stability. With these strategic interventions, we can pave the way for a vibrant future for our industry."
The National Hair & Beauty Federation (NHBF), representing approximately 5,000 members, stands as the UK’s largest trade body championing the hair, beauty, and barbering industries. Highlighting the sector's significant economic impact, the hair and beauty industry contributes an impressive £4.6 billion annually to the UK economy, with consumer spending reaching £24.5 billion across the sector in 2022.
Salon businesses, predominantly led by women entrepreneurs, play a pivotal role in the UK job market by offering meaningful careers to 257,000 individuals, with over half falling between the ages of 18 and 35. Beyond economic contributions, the sector boosts foot traffic in high streets nationwide and promotes community health and wellbeing. Although businesses in beauty, nails, and barbering are steadily growing, the number of hairdressers is declining.
Despite facing challenges, the industry has demonstrated remarkable resilience, displaying signs of recovery after brief rebounds in September 2021 and July 2022. However, half of the businesses still rely on external support, and an equal proportion is burdened by debt. More than half of these businesses anticipate taking over two years to clear their debts, while 22% express uncertainty about surviving the next six months.
Acknowledging the pivotal role of government support during crucial periods, the NHBF urges further targeted interventions through the Autumn Statement to foster the sector's growth and prosperity. Vital to the recovery journey is the continuation of the 75% Retail discount, essential for businesses on the path to recovery. Additionally, evidence indicates that businesses are hesitant to surpass the VAT threshold due to the potential imposition of significant extra taxes, hindering their growth prospects precisely when they need to expand the most.
With continued and targeted support from the UK Government, the NHBF remains confident that the hair and beauty sector will play a central role in the UK's economic recovery, contributing to thriving high streets and enhancing community wellbeing.