As of April 1st, 2025, the government’s latest budget comes into effect, bringing significant financial challenges for employed salons like Creations in Chichester. With costs rising by an additional £42,000 annually, the pressure on our business is immense.
Rising Costs and Financial Strains
Hairdressing is taxed as retail, meaning we pay 20% VAT on all income. However, unlike typical retail businesses, our ability to reclaim VAT is limited since wages account for 70% of our expenses. This results in salons being taxed three times harder than other high street businesses. The increase in minimum wage and employer National Insurance Contributions—a rate now set to rise to 15%—adds further strain to our wage bill. To compound matters, our business rates are set to soar by 240%, while supplier costs continue to rise across the board.
The Shift Towards Self-Employed Stylists
Many salons are moving towards self-employed “rent-a-chair” models to avoid VAT and National Insurance burdens. While this may seem like a solution, it undermines employment benefits like sick pay, pensions, and paid holidays. It also jeopardises apprenticeship programs, with forecasts suggesting they could disappear entirely by 2027 if current trends persist.
Creations’ Commitment to Our Team and Clients
At Creations, we remain committed to employing our talented team and investing in their growth through training and apprenticeships. However, absorbing these rising costs without adjustments is impossible. To ensure sustainability while maintaining the quality of service our clients expect, we will be reevaluating our prices and always looking at new cost-effective service options. Currently we have services such as:
- VIP Blow-Dry Club This is our subscription for blowdries, working out a really cost effective way to maintain your weekly blowdries.
- Colour Maintenance Appointments: Don’t forget we have our fast colour fix and fast colour fix plus services, which means you can top up your highlights anytime!
- Stylist Levels: Our cut and finish prices range from our New Talent stylists, to our senior team members, ensuring that every skill, experience and budgets are catered for… and don’t forget we have our standby appointments available too.
Standing Up for Employed Salons
While we were unable to attend the ‘Save Our Salons’ protest on March 17th due to prior team training commitments, we fully support the movement. We regularly meet with our local MP, Jess Brown Fuller, advocating for a VAT reduction to 10%. This change is crucial to protect employed salons and preserve apprenticeship opportunities.
Looking Ahead
Creations was built on the foundation of providing stable employment and developing long-term careers in hairdressing. We refuse to compromise these values by shifting to self-employment models. Instead, we will continue fighting for fairer taxation while delivering exceptional service.
We deeply value your loyalty and support during these challenging times. If you have any questions or wish to explore alternative service options or stylist tiers, please don’t hesitate to reach out. Together, we can ensure Creations continues thriving as a cornerstone of the Chichester community.
