UK Budget 2026: will VAT on hair and beauty be cut? What salons should watch on 28 October

Updated 19 October 2026, before the Budget. Measures are announced on 28 October - we'll update this page with what's confirmed. This page reports what has been asked for, not what will happen. General information, not tax or legal advice: check GOV.UK and HMRC, or ask your accountant.

When is the UK Budget?

The Budget is on Wednesday 28 October 2026. The Chancellor, John Healey, confirmed the date on 31 July (GOV.UK), and the Office for Budget Responsibility will publish its updated economic and fiscal forecast the same day (OBR). The official Budget documents, including HMRC's notes on any tax changes, are published on GOV.UK on the day.

What salons have asked for

The National Hair & Beauty Federation (NHBF) says it has already sent its case to HM Treasury. Its submission sets out five priorities (NHBF, 8 October 2026):

• Fairer VAT: a permanent 10% VAT rate for qualifying hairdressing, barbering and beauty-treatment services, with retail product sales staying at 20%, and a look at the problems businesses face around VAT registration.
• Sustainable pay: a cautious, evidence-led approach to future wage increases, enough notice for employers to plan, and targeted employer National Insurance or payroll relief for small, labour-intensive businesses creating extra jobs.
• Apprenticeships: a wage subsidy for small and micro businesses taking on an apprentice, help with supervision and training costs, and better access to apprenticeship funding.
• Fair competition: coordinated action on tax evasion, illegal working and deliberate non-compliance, while protecting genuine self-employment.
• High-street support: wider business-rates relief in England, protection for small businesses from revaluation shocks, and inclusion of hair and beauty businesses in local growth and regeneration programmes.

Separately, salon owners and industry groups have signed an open letter calling for VAT to be cut to 10% for hairdressers, barbers, spas and beauty salons in this Budget (The Telegraph, 6 October 2026). The same report quotes the British Hair Consortium saying the industry lost nearly a quarter of its employees last year and that apprenticeships are down 70%, and that some owners keep turnover below the £90,000 VAT threshold or move staff to chair rental. A Treasury spokesperson told the paper that decisions on tax are a matter for the Chancellor to set out at fiscal events.

Where costs stand today

These are the rules in force before the Budget, from GOV.UK and HMRC:

• VAT: the UK has three rates: 20% standard, 5% reduced and 0% zero rate (GOV.UK). There is no 10% rate today, which is why the sector is asking for one. You must register once taxable turnover for the last 12 months goes over £90,000, or you expect it to in the next 30 days (GOV.UK).
• Minimum wage: from 1 April 2026, £12.71 an hour for workers aged 21 and over, £10.85 for 18 to 20 year olds, and £8 for under-18s and for apprentices aged under 19 or in the first year of their apprenticeship (GOV.UK). See salon wage increases in 2026 and 2027.
• Employer National Insurance: 15% on earnings above £5,000 a year in 2026 to 2027. The employer rate is 0% for apprentices under 25 and employees under 21 on earnings up to £50,270 (HMRC). Employment Allowance can cut an eligible employer's bill by up to £10,500 a year (GOV.UK).

For the full list, including day-one sick pay, holiday pay and tips, see UK salon employer costs in 2026 and the Employment Rights Act 2025 for salon employers.

What to watch on Budget day

When the Budget documents are published on 28 October, these are the points that matter most for a salon, barbershop or beauty business:

• VAT on services: is there any new or reduced rate for hair, barbering or beauty services, which services qualify, whether retail products are included, and from what date?
• VAT threshold: any change to the £90,000 registration threshold or to registration rules.
• Employer National Insurance: any change to the 15% rate, the £5,000 threshold or Employment Allowance, and any targeted relief for small employers.
• Apprentices: any wage subsidy or change to apprenticeship funding for small and micro businesses.
• Business rates (England): any wider relief, and whether hair and beauty premises are included.
• Self-employment and chair rental: any measures on employment status or compliance.
• Start dates: many measures start in April or later, so check when each one applies before changing prices or payroll.

We'll add what's confirmed, with links to the official documents, to this page after the announcement.

What you can do now

• Plan payroll on today's rules. Cost every role at £12.71 an hour (or the right age rate) plus 15% employer NI above £5,000, and check with your accountant that you claim Employment Allowance if you're eligible. Don't build next year's budget on a change that hasn't been announced.
• Check apprentice and under-21 NI. Make sure payroll uses the right category letter so you aren't paying employer NI you don't owe on apprentices under 25 or staff under 21.
• Near the VAT threshold? Get advice first. Track your rolling 12-month taxable turnover, and talk to your accountant before changing how you trade or moving staff to chair rental. Employment status has legal and tax consequences.
• Protect every booked hour. Deposits, reminders and a waitlist keep paid staff on paying clients. See should your salon require a deposit? and how to fill last-minute cancellations.
• Review your prices once a year. See how to raise your salon prices.
• Stop paying for phone time. Count the hours stylists and desk staff spend answering routine calls. Those are paid hours that don't earn revenue. See cut salon costs without cutting staff hours.

How CallPad helps

Whatever the Budget brings, the cost of each staff hour is rising, so it pays to spend those hours on clients rather than the phone. CallPad is an AI receptionist for salons, barbershops, spas and clinics. It answers every call 24/7, including evenings, Sundays and the Saturday rush, without adding staff hours. It books and reschedules appointments in real time on supported booking systems, sends a missed-call text-back when a call can't be answered, replies to texts sent to your salon's number and can book by text, and texts clients on your waitlist when a slot opens up. Your team stays on paid services, and the calls that come in while everyone is busy still turn into bookings. Talk to us about CallPad for your salon.

Sources, checked 19 October 2026: NHBF, Fighting for a Fair Deal (8 October 2026); The Telegraph, Higher taxes on hairdressers are sexist, say salon owners (6 October 2026); GOV.UK, Budget date confirmed (31 July 2026); OBR, Autumn 2026 forecast date; GOV.UK, VAT rates; GOV.UK, When to register for VAT; GOV.UK, National Minimum Wage and National Living Wage rates; HMRC, Rates and thresholds for employers 2026 to 2027; GOV.UK, Employment Allowance.

Related guides

• UK salon employer costs in 2026
• The Employment Rights Act 2025 for salon employers
• Salon wage increases in 2026 and 2027
• Cut salon costs without cutting staff hours
• AI receptionist for UK salons

Frequently asked questions

When is the UK Budget in 2026?

Wednesday 28 October 2026. The Chancellor, John Healey, confirmed the date on 31 July 2026, and the Office for Budget Responsibility publishes its forecast the same day.

Is VAT on hair and beauty being cut?

Nothing has been announced as of 19 October 2026. The NHBF has asked the Treasury for a permanent 10% VAT rate on hairdressing, barbering and beauty-treatment services, with retail products staying at 20%. Any change would be set out by the Chancellor; we'll update this page on 28 October.

What is the VAT threshold for a salon?

You must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days. You can register voluntarily below that.

What employer National Insurance does a UK salon pay in 2026 to 2027?

15% on an employee's earnings above £5,000 a year. Eligible employers can claim Employment Allowance of up to £10,500 a year, and the employer rate is 0% for apprentices under 25 and staff under 21 on earnings up to £50,270.

How can CallPad help a salon with rising staff costs?

CallPad answers every call 24/7 without adding staff hours. It books and reschedules appointments, sends missed-call text-backs, replies to texts and books by text, and texts your waitlist when a slot opens, so stylists stay with clients.

Try CallPad

Get a quote for your salon, or hear CallPad answer a real salon call.