Nearly half of hair salons are in danger of being forced to close following the chancellor's devastating National Insurance contributions (NICs) announcement in last month's budget, industry leaders have cautioned.
The Times reports Carla Whelan, chief executive of the Regus and Supercuts group said the government's tax move “will see salons which have been around for many years close”.
She continued: “This creates an impossible profit and loss for individual hair salons where labour is circa 50% of the cost.”
It comes as the chancellor last month announced employer NICs would rise by 1.2% to 15% from April, a double-edged blow which will also see the level at which employers start paying the tax on salaries lowered from £9,100 to £5,000 per year.
The announcement set alarm bells ringing across a number of industries, and now a survey carried out by the British Hair Consortium, an industry group, found that two in five respondents to the survey said they were considering closing their businesses in the next 12 months.
The survey, as reported in The Times, also warned salon owners could switch to self-employed status as they may “feel forced to do so in order to survive”.
Toby Dicker, who owns five salons employing 65 people, said the changes in the budget would cost his business £122,000 in additional costs.