(qlmbusinessnews.com . Tues 29th Apr, 2025) London, UK —
Salon Owner Fears Repossession After October’s Tax Increases
Kerry Larcher, who opened her first salon at 21, now worries she could lose both her lifetime’s work and her home after tax rises introduced in October’s Budget imposed an extra £23,000 a year on her business.
The 50-year-old, whose Hornchurch salon has thrived for over three decades, says the new measures are “crippling” her trade and threaten to drive her into debt. “I’ve been crying myself to sleep because this has been the worst period of my life in 30 years,” she admits.
Since the chancellor lowered the National Insurance threshold and hiked business rates, Kerry’s annual NIC bill has surged from £42,000 to about £54,500, while her rates have leapt from £700 to £18,000. With no profit, she cannot pay herself a wage and fears her house will be repossessed if the salon folds.
Despite government assurances that business-rate reform arriving in 2026–27 will ease pressures, salon owners like Kerry say such relief comes too late. She has been forced to reduce her 12 apprentices to minimal hours—soon halving their number—and may have to make up to 22 of her 28 staff redundant within four years if costs remain unsustainable.
Kerry highlights how VAT rules disadvantage labour-intensive trades: salons can reclaim VAT only on supplies, not on staff costs, whereas cafés reclaim it on all sales. The British Hair Consortium, representing 50,000 professionals, is urging the chancellor to halve salon VAT to 10%, arguing it would stabilise tax receipts by keeping workers employed in the formal economy.
In Parliament this week, Conservative MP Julia Lopez raised Kerry’s plight, calling on Chancellor Reeves to cut salon VAT from 20% to 10%, especially given the sector’s female workforce. Labour’s Small Business Minister, Gareth Thomas, defended the Budget, noting expanded Employment Allowance will relieve many small employers. Liberal Democrat spokesperson Sarah Gibson warned that without further relief, salons will increasingly resort to self-employed chair rentals, undermining both jobs and long-term tax take.
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