BUDGET ROUND UP

We lay out the key points from the Autumn Budget, and industry voices share their thoughts

On 30 October 2024, Chancellor Rachel Reeves announced the Autumn Budget in the House of Commons. Here are the key factors that will likely impact our industry...

1 Minimum Wage Increase:
The government has announced a rise in the minimum wage from April 2025 with the following new rates:

National Living Wage (21 and over): £12.21 per hour

18-20 year olds: £10.00 per hour 16-17 year olds: £7.55 per hour Apprentices: £7.55 per hour.

2 Employers National Insurance and NICS:
The Chancellor has committed to not raising NI rates for employees, but this freeze does not apply to employers. Employers’ National Insurance contributions will rise from 13.8% to 15%. The threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000. The Employment Allowance will increase from £5,000 to £10,500, which the chancellor says will mean 865,000 employers won’t pay any National Insurance at all next year.

4 Tax Simplification and Digitalisation:
This could benefit hairdressers by streamlining tax compliance and potentially reducing admin.

5 Business Rates Relief Decrease:
The 75% relief for eligible RHL properties is reduced to 40% for 2025-26, with a maximum discount of £110,000.

6 Corporation Tax Capped:
Corporation Tax will stay capped at 25% and VAT rates are not anticipated to change.

THE INDUSTRY'S REACTION

TOBY DICKER, CO-FOUNDER OF THE SALON EMPLOYERS ASSOCIATION

“The increase in labour costs will impact businesses by tens of thousands. Hairdressing businesses are affected five times more than other businesses because of the way we operate. This is the worst thing that has happened to our industry. Governments have been misinformed about our industry for a long time and they aren't listening.”

CLIVE COLLINS, HOB SALONS

"We’ve seen a 6.7% increase to National Minimum Wage and an unbelievable 16% to under 20’s and Apprentices. In real terms, with the increase in Employer’s National Insurance that will be charged because the threshold will not change, this is a 9% increase for those over 21. The 1.2% increase in employers National Insurance will cost us as a business an increase of £50,000. Overall, it’s a disastrous budget for small businesses.”

NOEL HALLIGAN, NOCO HAIR BRISTOL

“Overall, it isn’t great: National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000, so it feels like small businesses just won’t be able to employ as many people. Retail, leisure and hospitality will receive 40% business rates relief which is ok, but I’m not sure that will save some salons.”

CAROLINE LARISSEY, CHIEF EXECUTIVE OF THE NATIONAL HAIR & BEAUTY FEDERATION

‘We’re pleased that there will be a rise in the Employment Allowance which will benefit some sector businesses, despite the rises to employers National Insurance contributions. However, with 16%+ rises in the youth wage rates there was nothing on interim support for businesses training young people. The only ‘youth guarantee’ for our sector will be that small and micro employers won’t be able to afford to take on apprentices. It’s vital that the new Growth & Skills levy channels major support to incentivise training apprentices.”