The British Beauty Council has issued a stark warning that hair and beauty salons across the United Kingdom could be forced to "pull down their shutters for good" unless the government extends crucial support on business rates. This urgent call comes as the sector faces what industry leaders describe as "devastating" cost increases that threaten its very survival.
Profitability Hollowed Out by Spiralling Costs
Victoria Brownlie, chief policy and sustainability officer at the British Beauty Council, explained that salon profitability has been systematically "hollowed out" by escalating labour expenses and utility bills. The looming changes to business rates threaten to pile additional financial pressure onto already struggling businesses.
"The British Beauty Council is calling on the Chancellor to recognise that without urgent intervention on business rates, the vibrant salons that define our local economies may soon be forced to pull down their shutters for good," Brownlie stated emphatically.
How Business Rates Reforms Are Impacting Businesses
The government's attempt to reform business rates - the tax on non-domestic properties - has created significant challenges for retail and hospitality sectors. A company's liability is calculated by multiplying its 'rateable value' (an estimate of the property's rental value on the open market) with a national multiplier set by government authorities.
Although the government reduced the multiplier for most businesses in the recent Budget, the reassessment of property values - which occurs every three years - has more than offset this reduction. Property valuations have increased substantially since the pandemic, leaving many businesses facing significantly higher tax bills from April onwards.
Devastating Spike in Fixed Costs
"Even with the Government's new Retail, Hospitality, and Leisure multipliers, rising rental values mean the underlying property values have surged, effectively cancelling out any intended tax benefits," Brownlie explained. She warned that high-street businesses now face a "devastating spike in fixed costs" that could prove insurmountable for many.
The situation has been exacerbated by what the beauty sector perceives as unequal treatment. While the Chancellor announced a £300m support package for pubs in January, this assistance has not been extended to other parts of the hospitality industry despite intense pressure from sector representatives.
Call for Equal Treatment Across Hospitality
"This week, we have witnessed the Government's recent announcement to lend further support to pubs, while leaving salons behind. We argue that our sector provides equal social and economic value," Brownlie asserted. "We urge the Treasury to extend the same level of protection to hair and beauty SMEs as is being considered for pubs."
The beauty industry is not alone in expressing concern about the business rates changes. Other sectors have also warned about the detrimental impact, including the music industry where representatives from leading recording studios told the Times that some members face increases as high as 45 per cent. Such dramatic rises could force studio closures and potentially compel British artists to record their work abroad.
Government Response and Industry Concerns
When contacted for comment, a Treasury spokesman pointed to existing support measures: "We're backing businesses with a £4.3 billion budget package to cap big bill hikes - stopping bills rising for over half of business properties. This is on top of capping corporation tax at 25 per cent, cutting red tape, and helping deliver six interest rate cuts, boosting businesses."
However, industry leaders argue that these measures may prove insufficient for hair and beauty salons operating on narrow margins. The sector emphasises its importance to local economies and communities, providing not just services but social hubs that contribute significantly to high street vitality.
As the April deadline approaches for the new business rates to take effect, the British Beauty Council continues to lobby for urgent intervention, warning that without government action, the distinctive character of Britain's high streets could be permanently altered by the loss of these community-focused businesses.
