What the 2025 Budget Means for the Hair and Beauty Industry

Raymond
Dec 3
3 min read

The latest Budget brings a handful of changes that will shape the year ahead for salons.

From wage updates to shifts in business rates, these changes naturally influence how we plan, price and support our teams. Rather than approaching this as a list of tasks, it can simply be a moment to check in, get a feel for what’s changing, and think about what might matter most for your salon in the months to come.

Wage Changes for April 2026

The National Living Wage and National Minimum Wage will rise again from April 2026. The percentage increases are smaller than in recent years, but still meaningful for salons with younger teams, assistants, or developing stylists.

Key Wage Changes

21+ (National Living Wage): £12.71 per hour
18-20 (National Minimum Wage) : £10.85 per hour
16-17 & Apprentices: £8.00 per hour

The 18-20 rate continues to rise faster than other bands, gradually narrowing the gap between National Living and Minimum Wage. For salons, this can be a prompt to double‑check that your pricing is working versus your wage commitment.

Actions You Can Take

Review whether your entry‑level prices still support your wage commitments.
Look at how long services take versus the wage cost behind them.

Small, proactive steps now can prevent rushed decisions in the New Year. If December is busy on the shop floor or with team management, simply adding a note for January can be enough. A quieter moment at the start of the year is often the perfect time to sit down, reflect, and make clear decisions.

Business Rates: A Change of Structure, Not Just a New Bill

Business rates are changing from April 2026, with new multipliers for England and Wales and updated valuations across the UK. For salons, the impact simply comes down to your new rateable value; some will see a reduction, some an increase, and many will stay broadly the same.

A quick check now helps you get your bearings:

Look up your draft rateable value for England & Wales here → Look up your draft rateable value for Scotland here → Wanting to contest your Valuation? You can appoint a surveyor to review or challenge your valuation, just be mindful of fees and “no win, no fee” terms, and choose someone reputable. Rate relief remains available, with tapered support in England, Scotland and Wales.

Changes to Directors' Dividends

For salon owners operating as limited companies, from April 2026, the tax rates applied to dividends increase by two percentage points. This means:

Basic rate dividend tax rises from 8.75% to 10.75%
Higher rate dividend tax rises from 33.75% to 35.75%
Additional rate remains at 39.35%

While the change is not dramatic, it may affect how and when you choose to take income from your company. If you rely on a blend of salary and dividends, it could be worth reviewing your approach early in the new year. Your accountant can advise whether adjusting your salary/dividend mix, using pension contributions, or timing dividend declarations differently could help you stay tax‑efficient.

Bringing the Budget Into Everyday Salon Decisions

The Budget becomes practical when it directly connects to what you do day to day: pricing, team conversations, cash flow, and performance.

Here are a few simple checkpoints you may choose to explore in the New Year, particularly if December has been full on and January gives you the space to pause, reflect and plan:

Assess your profitability by asking your accountant to help you review your P&L up to the last fully reconciled period. This could show how your business is performing now and how resilient it will be to upcoming changes.
Review your price list to ensure rising wages can be supported.
Prepare your team in the New Year so they understand wage changes, tax implications, and how pricing supports the whole business and their wages.
Factor updated business rates into your 2026 planning and cashflow.

Planning for the year ahead doesn’t need to happen all at once. A gentle, steady approach, one considered step at a time, can make the process feel far more manageable

As always, if you’d like a little more support, you’re welcome to reach out.

If you’d like to talk through how these changes might apply to your salon, you can book a free, relaxed 20‑minute call with the MySalonManager team. We’re always happy to offer guidance and help you find a clear way forward. Click here to find out more.