Tax Burden Threatens Future of Apprenticeships in UK Hair Salons

Kerry Larcher, owner of The Vanilla Room hair salon in East London, expresses the financial strain her business faces due to recent tax changes, which could cost her over £1,000 weekly. With 36 employees and 12 apprentices, the salon typically welcomes four to five new apprentices annually, but may not be able to continue this practice moving forward due to escalating costs. The British Hair Consortium, representing 50,000 UK hairdressing professionals, advocates for halving the VAT for salons from 20% to 10%, arguing that the labor-intensive nature of their work makes it harder to recoup these costs compared to product-based businesses. Reports suggest that many salons are opting to rent chairs instead of employing stylists directly to avoid heavy taxes, which could significantly reduce apprenticeship opportunities. CBI Economics forecasts a grim future for the sector, indicating potential elimination of new apprenticeships by 2027 and a 93% drop in direct employment by 2030 if current tax structures remain. Toby Dicker, co-founder of the British Hair Consortium, calls for a reform in the one-size-fits-all tax system, emphasizing that reduced VAT could help salons survive and sustain apprenticeship programs. Meanwhile, the Treasury claims to be leveling the playing field for high street businesses through business rate adjustments.