British Hair Consortium Appeals for Urgent Tax Reform to Save Jobs
The British Hair Consortium (BHC) has launched a sector-wide campaign calling on hairdressing, barbering and beauty businesses to write to their MPs in support of urgent tax reform, warning that current VAT rules are driving legitimate salons out of employment models and into self-employed chair-rental arrangements.
The campaign, branded One Voice, is timed to coincide with a new Growth Taskforce of 74 MPs set up by government to assess how the tax system could better support growth. The BHC is asking the industry to register through its campaign portal and is providing a template letter for members to send to taskforce MPs directly.
Analysis published by the BHC sets out the scale of the contraction in salon employment. Employment in the sector fell by 20,000 people in 2025, equivalent to nearly a quarter of remaining employee jobs disappearing in a single year. The BHC says this leaves 65,500 employees in the sector, which it describes as the lowest figure on record.
The Consortium's data also shows a widening split between VAT-registered and non-VAT-registered operators. According to its analysis, VAT-paying salons have grown three times slower than the wider economy, while non-VAT-paying operators have grown three times faster.
Drawing on ONS data and a BBC File on Four investigation into bogus self-employment, the BHC estimates that around £1 billion was lost to the Treasury in the last 12 months through tax avoidance and evasion, split roughly equally between £500 million in unpaid VAT and £500 million in unpaid National Insurance.
Toby Dicker of the BHC said the structural pressure was now forcing legitimate operators to restructure their businesses to stay open. "It's become so bad that for many owners, the only way they can keep running is to artificially sink below the VAT threshold and become micro businesses. They're laying off staff and then renting chairs to them as self-employed contractors," he said.
The campaign also raises concerns about the rollout of Making Tax Digital (MTD) for Income Tax, which became mandatory this month for sole traders and landlords with qualifying income over £50,000. The threshold is scheduled to drop to £30,000 in April 2027 and £20,000 in April 2028.
The BHC said it was concerned that operators who had moved to self-employment to survive may now be unknowingly operating outside HMRC guidance on employment status, and could be at risk of prosecution as MTD enforcement ramps up. It said these businesses needed proper representation at government level rather than being abandoned.
The campaign reflects a long-running argument inside the hair and barbering trade that the £90,000 VAT registration threshold creates a hard ceiling for salons that pay employees, while rewarding the chair-rental and freelance model that has expanded rapidly across the high street. With the Growth Taskforce now in place, the BHC is positioning the next twelve months as the best chance the industry has had in years to put a sector-specific case directly to MPs with a brief to listen.
For more information or to join the campaign here or contact enquiries@bhc.org.uk.
