The British Hair Consortium (BHC) is campaigning for tax reform, urging industry professionals to contact their MPs. This call comes as the government forms a 74-MP Growth Taskforce to examine tax's role in economic expansion.
The sector faces increased taxes, new regulations, and the Fair Work Agency. A new inspection body can now enter businesses to check compliance. The BHC highlights that understanding these changes is crucial for businesses now.
Employment in hairdressing, barbering, and beauty dropped by 20,000 in 2025. This represents nearly a quarter of all employee roles lost in just one year, leaving 65,500 employees. The BHC notes that VAT-paying salons grew slower than the general economy, while non-VAT-registered businesses expanded faster.
The consortium estimates £1 billion in tax revenue was lost last year due to avoidance and evasion. This includes £500 million in VAT and £500 million in National Insurance. These market distortions put compliant businesses under pressure.
The introduction of Making Tax Digital (MTD) for Income Tax from April 2026 requires quarterly updates for sole traders and landlords with income over £50,000. This requirement will extend to incomes over £30,000 in April 2027 and potentially £20,000 in April 2028.
The BHC expressed concern that some businesses may not comply with MTD guidelines, especially those who shifted to self-employment without fully grasping regulatory shifts. The consortium advocates for better government representation and support for these businesses.
