Clinics excluded from new 20% business rates cut for high street venues

Aesthetic clinics are not included in the Government’s newly announced 20% business rates discount, despite renewed industry calls for tax reform to support personal care businesses

Prime Minister Andy Burnham has announced a new 20% reduction in business rates bills for pubs, social clubs and live music venues in England, but the targeted relief does not extend to beauty salons, hairdressers, barbershops or aesthetics clinics.

The measure is due to apply from the 2027/28 financial year and will benefit nearly 32,000 eligible venues, according to the Government. It estimates that the typical pub will save around £1,100 during the year.

The announcement comes days after the National Hair & Beauty Federation (NHBF) urged the new Prime Minister to include hair, beauty, barbering and aesthetics businesses in reforms intended to support high streets.

What is the new 20% business rates cut?

Under the Government’s plans, pubs, social clubs and live music venues will receive an additional 20% reduction in their business rates bills from April 2027.

The package is worth around £100 million a year and will be funded partly through a review of existing reliefs for businesses the Government says do not make a positive contribution to local communities, including vape shops.

The Government also plans to strengthen measures targeting sellers that use online marketplaces but do not meet their UK tax obligations. Revenue raised through these reforms will be reinvested in improvements to the business rates system.

The new discount will not apply to the largest live music venues, with further eligibility details expected at the Budget.

It comes on top of a previously announced 15% relief for pubs and live music venues in 2026/27, followed by a two-year real-terms freeze in their bills.

Are aesthetic clinics included in the business rates discount?

Aesthetic clinics and other personal care businesses are not among the sectors named as eligible for the new targeted 20% reduction.

This does not necessarily mean that clinics will receive no support through the wider business rates system. More than 750,000 retail, hospitality and leisure properties were covered by a permanent 5p reduction in business rates multipliers announced in the Autumn 2025 Budget, while transitional support was introduced for businesses facing higher bills following revaluation.

However, the additional sector-specific discount announced on July 23 is limited to pubs, social clubs and qualifying live music venues.

The decision is likely to increase scrutiny of how the Government defines the high street businesses that provide social and community value.

Announcing the plans, Burnham said, “For too long, governments have stood by while cherished venues have disappeared from our local high streets. So today I am changing that.

“This government will back the businesses that people want to see in their communities. I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do. What we’re announcing today is just the start as we work to bring back hope across the country.”

The National Hair & Beauty Federation has now called on ministers to extend the same support to hair, beauty, barbering and aesthetics businesses, arguing that they also act as community hubs and generate employment, apprenticeships and high street footfall.

Sam Silver, NHBF head of policy and public affairs, said, “We welcome the Government’s commitment to backing businesses that people want to see in their communities, but it begs the question: if pubs are worth backing, why aren’t the businesses that millions of people visit every week to feel confident, improve their wellbeing and face the world?

“Hair salons, barbershops and beauty businesses are at the heart of every high street, providing trusted spaces that bring communities together, support mental wellbeing, create jobs and train the next generation of skilled professionals.”

This follows a new campaign launched by Professional Beauty and Hairdressers Journal – "At The Heart Of The Community" – which is designed to help the salon and spa sector loudly demonstrate its vital economic and community value.

The campaign aims to shift the narrative around the industry by celebrating salons and clinics as foundational community anchors, critical drivers of high street footfall and major creators of local employment.

NHBF urges Government to extend business rates relief to salons

The NHBF has welcomed the 20% reduction for pubs, clubs and live music venues but is urging the Government to extend targeted business rates support to the UK’s hair, beauty, barbering and aesthetics sector.

The organisation said hair and beauty businesses support local economies, create skilled employment, provide apprenticeships and generate footfall for neighbouring shops, cafés and other independent businesses.

It also stressed that salon and beauty services cannot move online or relocate to warehouses because they depend on physical premises within towns, villages and city centres.

Silver said, “Our sector is every bit as important to thriving communities as hospitality. Extending business rates relief to hair, beauty, barbering and aesthetics businesses would be an investment in jobs, apprenticeships, community wellbeing and the future of Britain’s high streets. If Government is serious about backing local businesses, our sector must be part of that vision.”

The NHBF said its recent employer research identified business rates as one of the main financial pressures facing businesses, alongside VAT, employer National Insurance Contributions and rising wage costs.

This reaction follows the NHBF's open letter to Burnham, in which it called for business rates reform to be combined with a reduced 10% VAT rate for labour-intensive personal care services.

British Beauty Council calls exclusion a “slap in the face” to high streets

The British Beauty Council has also called for personal care businesses to be included in future business rates relief, arguing that salons play a central role in sustaining local high streets, employment and daytime footfall.

Speaking exclusively to Professional Beauty, Victoria Brownlie MBE, chief policy and sustainability officer at the British Beauty Council, said, “Excluding personal care from this relief while handing pubs and music venues a second business rates cut is quite frankly a slap in the face to our high streets. High street businesses are interdependent ecosystems – pubs cannot thrive surrounded by boarded-up salon and retail storefronts.

“With overheads soaring, our sector’s GDP contribution has dropped to £28.3bn and 17,000 jobs were lost in the last year alone. The Treasury needs to stop picking winners and support the whole high street.”

Brownlie said beauty services should be included in future business rates and high street support because their ability to increase revenue is constrained by the size of their premises and the number of clients they can accommodate.

“Our industry absolutely belongs in future rate relief schemes. Unlike hospitality, salons and retail can’t expand capacity with outdoor seating or pivot business models to boost revenue. Their income is limited by shelf space and physical chair and treatment space,” she said.

“Rising rateable values hit our sector’s margins with brutal severity. If the Government wants fair high street support, it must maintain unified Retail, Hospitality, and Leisure relief across all bricks-and-mortar businesses."

The British Beauty Council said the personal care sector contributes £28.3 billion to UK GDP and employs 595,000 people. According to the Council, 86% of the sector is female-led, half of its workforce is under 35 and 45% of businesses operate in areas of high deprivation.

Brownlie said, “Personal care businesses are true day-to-day anchors of the high street. They vastly outnumber pubs on high streets and urban areas and drive vital daytime footfall.

“As a £28.3bn, 86% female-led sector employing 595,000 people, half of which are under 35, we provide essential career and apprenticeship pathways. Furthermore, 45% of businesses operate in areas of high deprivation, demonstrating a sector offering support where it’s needed most.”

The Council is calling for equivalent business rates relief for personal care businesses, changes to Small Business Rates Relief and a stronger link between taxes on online marketplaces and support for physical high street premises.

Brownlie added, “If the Prime Minister and his new Cabinet are genuine in their commitment to back ‘the beating heart of our communities’ then we need Treasury to act by extending equivalent business rates relief to personal care businesses who provide a vital anchor to high streets up and down the country.

“We also need reforms to Small Business Rates Relief so expanding businesses aren't penalised the moment they grow and a greater link between online marketplace tax reform with physical rates relief, in order to keep high streets competitive as e-commerce grows.”

Beauty APPG chair urges Chancellor to include personal care in future rates relief

Carolyn Harris, Labour MP for Neath and Swansea East and chair of the All-Party Parliamentary Group for Beauty, Hair and Wellbeing, has written to Chancellor John Healey calling for the beauty industry to be included in future business rates support.

In an open letter, Harris welcomed the targeted relief for pubs, clubs and music venues but said she was “profoundly disappointed” by the continued exclusion of beauty businesses.

She wrote, “Beauty makes a huge £28.3 billion contribution to the UK GDP and employs almost 600,000 people. It is a predominantly female industry, with 86% of its 196,563 businesses owned by women.”

Harris also highlighted the sector’s presence on UK high streets, stating, “Personal care and beauty amenities make up 36% of all leisure and recreation amenities on our high streets. So if the government is serious about backing the businesses that people want to see in their communities, it cannot continue to ignore beauty's outsized contribution.”

The letter said the industry continues to face post-pandemic pressures, with employment and its contribution to GDP falling over the past year.

Harris wrote, “Despite this, the industry was excluded from the 15% business rates relief given to other sectors this April, and will now be excluded from yet another 20% discount being given to these same businesses next year.”

She argued that extending relief to personal care businesses would support salons, spas and beauty retailers across the country.

“Given the size of the beauty industry's contribution to our economy, the number of people – and especially women – it employs, its centrality to our high streets, and the significant challenges it is facing, there is no good reason for its continued exclusion from support,” Harris said.

She has asked the Chancellor to explain what consideration has been given to including the personal care sector in future business rates cuts.

Why business rates matter to aesthetic clinics

Business rates are charged on most non-domestic properties and can represent a significant fixed cost for salon owners operating from physical premises.

Unlike digital or mobile businesses, high street clinics rely on treatment rooms, equipment and client-facing spaces that cannot simply be moved online.

The Government has said it will return to wider business rates reform, including Small Business Rates Relief, at this year’s Autumn Budget, which is expected in late October or early November.

Ireland introduces lower VAT rate for hairdressers

The UK industry’s calls for tax reform also follow a VAT reduction for hairdressing services in the Republic of Ireland.

From July 1, 2026, the VAT rate applying to Irish hairdressing services fell from 13.5% to 9%. The reduced rate also applies to qualifying restaurant and catering supplies, hot takeaway food and certain drinks.

The Irish measure applies specifically to hairdressing services and does not provide an equivalent reduced VAT rate for beauty treatments.

The Irish Hairdressers Federation had campaigned for the change, presenting it as a measure to improve business viability amid rising wages, energy, insurance and operating costs.

The development provides a current example of a neighbouring government using targeted tax changes to support a labour-intensive personal care sector, although the structure of the Irish VAT system and the scope of the measure differ from the reforms being requested in the UK.

What happens next for clinic business rates?

The immediate 20% discount will remain limited to the venues specified by the Government unless its scope is changed before implementation.

Further details about eligibility, funding and the treatment of larger venues are expected to be set out at the next Budget.

For aesthetic clinic owners, attention will now turn to whether the wider review of business rates and Small Business Rates Relief results in additional support for personal care businesses.

The NHBF is also calling for the Government to develop a combined package covering business rates, VAT, apprenticeships and wider high street policy.

FAQs

Are aesthetic clinics included in the new 20% business rates cut?

No. The additional 20% discount announced by the Government applies to eligible pubs, social clubs and live music venues in England. Beauty salons, hairdressers, barbershops and aesthetics clinics are not included in the targeted measure.

When will the new business rates discount begin?

The additional 20% reduction is expected to take effect from April 2027, at the start of the 2027/28 financial year.

Can beauty salons still receive business rates relief?

Some salons may qualify for existing support, such as Small Business Rates Relief or other wider business rates measures, depending on their rateable value and circumstances. However, they will not automatically receive the new sector-specific 20% discount.

What tax changes is the NHBF requesting?

The NHBF is calling for wider business rates reform and a reduced VAT rate of 10% for labour-intensive personal care services. It has also asked for changes to the VAT threshold and for personal care businesses to be included in the Government’s wider high street strategy.