How the Autumn Budget 2024 Will Affect the Beauty Industry
The Autumn Budget 2024, presented by Chancellor Rachel Reeves, introduces several financial adjustments that will directly affect the beauty industry. The sector, contributing over £27 billion annually to the UK economy, will see higher operational costs due to new taxation and wage policies.
Key changes include:
Business Rates: Relief for beauty services has decreased from 75% to 40%, which may strain businesses as operational costs rise.
National Living Wage: The rise to £12.21 per hour places additional financial pressure on smaller salons reliant on junior staff.
Energy Costs: The termination of the Energy Bill Discount Scheme in April 2025 could see energy costs increase up to 40%, adding further financial burdens.
Apprenticeships and Training: Although the budget boosts apprenticeship support in some industries, beauty sector incentives remain limited, impacting the workforce pipeline.
“The increase on employment allowance will certainly help to temporarily lighten the load for smaller beauty businesses” comments Lesley Blair MBE, CEO & Chair of BABTAC & CIBTAC “However, the increase in National Insurance payments for employers to 15% is likely to cause a further strain for some, increasing employer costs which may have a knock-on effect for not only the employee, but customers too.”
“As employer overheads increase, we may expect to see lower wage increases affecting day-to-day spending and disposable income, potentially resulting in more people feeling the pinch and cutting back on non-necessities. For some businesses, they may feel the need to increase prices for their customers in order to cover any losses.”
While the 2024 budget offers some relief to the beauty industry, professionals are urging the government to expand on these measures. Key areas include additional support for apprenticeships, further VAT adjustments, and long-term strategies to sustain small businesses through rising costs and wage demands.
Read the full budget statement here.
