STRONG support

As co-founder of the Salon Employers Association, Hellen Ward has written an open letter to Government to ask for changes that level the playing field for our sector

Firstly, sincere thanks to everybody who turned up on Monday, March 17, to protest in Parliament Square on behalf of the industry. As the Salon Employers Association (SEA), part of the British Hair Consortium (BHC), we will never stop trying to get our message out there, and the media coverage we received was phenomenal.

We couldn’t have commissioned our report by CBI Economics without the huge support from our sponsors Phorest, Zenoti and Wella. The support and coverage we’ve had from the PB Group has also been amazing, so thank you MD Mark Moloney, head of editorial Eve Oxberry and executive director Jayne Lewis-Orr.

At the time of writing, the first payday since the NICS increases on April 6 hasn’t yet hit, but when it does, many businesses will truly feel the fiscal impact and fully understand the grave consequences of inaction by the Government.

SEA does not just represent hairdressing, but beauty salons, too. The fact that there are historically far greater numbers of apprentices in the hairdressing sector than beauty meant that this was a key focus for getting the powers that be to listen, but the financial consequences of the NCIS increases have hit both sectors, so if you have not already signed up, and you are a salon owner, please add your voice to the thousands of people we represent who are working in the hair and beauty industry at salonemployersassocation.com. We can then invite you to join our WhatsApp group, where our members share business ideas, social chats and you can keep updated on all our announcements.

I must point out that SEA does not have any issues with legitimate freelancing in the hair and beauty sector. We only ever have an issue with disguised employment, as our support of the FHA (Freelance Hair Association) demonstrates.

Call for change

Such is the importance of our campaign, we have sent an open letter to the Government.

In it, we urgently appeal for VAT reform following the recent report by CBI Economics, which highlighted the threat to traditional employment and apprenticeship training models, as salon owners increasingly abandon PAYE-based employment in favour of self-employed rent-a-chair or room models due to rising costs and uneven taxation.

“With NICS increases and VAT paid at full rate and being unable to claim back little in the way of input tax, if there is a way to legitimately switch to the rent-a-chair/room model without it being considered disguised employment, then enforceable guidelines need to be published forthwith, as salon owners using the conventional heritage employment model simply cannot compete. You must appreciate the desperation felt by the employers we represent, when the recent Budget penalised those employing and left those running a self-employed model with no further tax burden or minimum wage imposition”, the letter states.

We stress that hair and beauty salon wage costs are five times more as a percentage of turnover than traditional retail and that, unlike some other labourintensive industries, we have the extra costs of needing to operate on the high street.

''Hair and beauty salon wage costs are FIVE TIMES MORE as a percentage of turnover than TRADITIONAL RETAIL''

The letter also states that current VAT policies, National Insurance increases, and a lack of allowable input tax deductions have created an unlevel playing field. Employers using the PAYE model are penalised, while those adopting selfemployment models avoid minimum wage obligations and other employment costs, resulting in a tax burden discrepancy of up to 123% (as per the CBI report).

This imbalance is forcing many legitimate employers to switch business models simply to survive, which severely threatens the future of apprenticeships.

The letter raises concern that government guidelines on operating rent-a-chair models are outdated and not aligned with modern practices. Current industry norms such as shared booking systems, lack of individual price lists, restricted access for contractors, and centralised customer communication often contradict HMRC’s existing definitions for selfemployment, potentially classifying many operations as “disguised employment”.

In the letter, SEA calls for immediate clarification on these guidelines to ensure compliance and protect employers who may otherwise face penalties for unknowingly breaching rules. We argue that a majority of salons cannot realistically comply with these outdated rules and request urgent revisions, insisting SEA be involved in the process.

We also highlight a wider concern regarding illicit practices within parts of the industry, citing that some barber shops and nail bars act as fronts for money laundering, human trafficking and other criminal activity, yet enforcement appears absent.

Next generation

Another key point raised is the diminishing apprenticeship opportunities. Since self-employed salons typically don’t operate PAYE systems, they cannot take on apprentices, jeopardising the future workforce.

The letter argues that without intervention, including VAT relief similar to that granted to hospitality during the pandemic, the industry faces collapse within a decade.

We state, “Please read the report you were sent in full and then you may begin to understand that we are proposing; a saving of employment and apprenticeship opportunities, a reduction in tax evasion and avoidance to the tune of £400 million a year, and then come back with some sensible suggestions and questions.”

The letter ends with a request for a meeting with Government representatives for an honest discussion to help shape fairer, enforceable policy that protects employment and training in an industry vital to the UK high street. You can read the letter in its entirety at professionalbeauty.co.uk/sealetter

Hellen Ward is managing director of Richard Ward Hair & Metrospa in London, vice president of The Hair & Beauty Charity and co-founder of Salon Employers Association (SEA).