Personal Care Services: Taxation
The question
To ask the Chancellor of the Exchequer, what steps she will take to address the tax disparity that sees employing hairdressing salons pay 123% more tax than self-employed hairdressing salons for the same turnover.
Answered by Dan Tomlinson
The Government recognises the vital role that hairdressing salons play in communities and the wider economy.
An individual's employment status is determined by the facts and circumstances of the engagement between the worker and engager. This is based on case law. The Government recognises that firms in the hair and beauty sector operate under different business models.
The Government has taken steps to support small businesses. To protect the smallest businesses from changes to employer National Insurance Contributions (NICs) made at Autumn Budget 2024, the Government increased the Employment Allowance from £5,000 to £10,500. This means that this year, 865,000 employers will pay no NICs at all, and more than half of all employers will either gain or will see no change.
The Government is also supporting small businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance.
The Government keeps all areas of the tax system under review. Any changes to the tax system are announced as part of the annual Budget process.
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