Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, how many people are currently employed in the hair and beauty sector.

Answered by Georgia Gould - Parliamentary Secretary (Cabinet Office)

The information requested falls under the remit of the UK Statistics Authority.

A response to the Rt. Hon gentleman’s Parliamentary Question of 26th February is attached.

Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, how many apprentices are working in the hair and beauty sector.

Answered by Georgia Gould - Parliamentary Secretary (Cabinet Office)

The information requested falls under the remit of the UK Statistics Authority.

A response to the Rt. Hon gentleman’s Parliamentary Question of 26th February is attached.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps her Department is taking to tackle disguised employment practices in the hair and beauty sector.

Answered by James Murray - Exchequer Secretary (HM Treasury)

HMRC is committed to ensuring that the tax system operates fairly and efficiently and creates a level playing field for compliant businesses. Most businesses pay what they owe but a minority fail to register with HMRC or only declare a portion of their earnings. This minority deprive our vital public services of funding, affect fair competition between businesses, and place unfair burdens on everyone else.

We are committed to tackling false self-employment and will investigate evidence suggesting businesses have misclassified individuals for tax purposes. In these cases, we will take steps to ensure they pay the right Income Tax and National Insurance contributions.

HMRC is making it increasingly difficult for businesses to hide their earnings and have an extensive range of powers, including information gathering powers, that help build a picture of risk and identify those who are trying to abuse the system. Our approach to tax compliance includes a range of activities that aim to both detect and tackle current non-compliance and change future behaviours. Their activities include national campaigns and specialist task forces that incorporate intensive bursts of activity in targeted sectors and locations across the UK. This includes providing customer education highlighting the importance of keeping accurate records. However, we will not hesitate to use stronger sanctions against customers who deliberately choose not to comply, including potential criminal prosecutions for the most serious cases involving tax evasion.

We recognise that some customers can find it hard to understand their tax obligations, so we are developing and testing new educational material to better explain the rent a chair model to make it easy for them to get things right and intervening early to reduce mistakes. We are planning for this to be ready for publication on GOV.UK in the spring. We are continuing to work on updates to the Taxable Persons manual and these will be published in due course.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the increase in employer National Insurance contributions on hair and beauty sector.

Answered by James Murray - Exchequer Secretary (HM Treasury)

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, the impacts on individuals, businesses, and civil society organisations as well as an overview of the equality impacts.   
  
The Office for Budget Responsibility also published the Economic and Fiscal Outlook (EFO), which sets out a detailed forecast of the economy and public finances.

Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, what steps his Department has taken to support the hair and beauty sector.

Answered by Gareth Thomas - Parliamentary Under Secretary of State (Department for Business and Trade)

This Government recognises the significant economic and social value of the hair and beauty industry.

That is why we have committed to reforming business rates from 2026-27 with a permanently lower multiplier for retail, leisure and hospitality properties, including hair and beauty salons.

The Government will also protect the smallest businesses by increasing the Employment Allowance to £10,500, meaning that 865,000 employers will pay no National Insurance contributions (NICs) at all and employers will be able to employ up to four full-time workers on the National Living Wage and pay no employer NICs.

We will also transform the existing Apprenticeship Levy into a more flexible Growth and Skills Levy to support business and boost opportunity.

Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, whether he has made an assessment with the Chancellor of the Exchequer and HMRC of the number of people currently practicing in the hair and beauty sector using disguised employment practices.

Answered by Justin Madders - Parliamentary Under Secretary of State (Department for Business and Trade)

The Department for Business and Trade does not hold this information. However, we are clear that disguised employment practices such as false self-employment are unacceptable. Employers should never seek to deny people their employment rights and avoid their own legal obligations by claiming someone is self-employed when in reality they are not.

The Government is committed to tackling false self-employment and HMRC will investigate evidence suggesting businesses have misclassified individuals for tax purposes. The Government has also set up a forum with the hair and beauty industry to support compliance in the sector.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential implications for his policies of the British Hair Consortium commissioned CBI Economics report entitled Securing the future of UK hairdressing and beauty: the economic, fiscal and societal case for VAT reform, published on 19 February 2025.

Answered by James Murray - Exchequer Secretary (HM Treasury)

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s second largest tax, forecast to raise £171 billion in 2024/25. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

Changes to the VAT threshold have to be carefully balanced considering the potential benefits to small businesses, the economy as a whole and tax revenues.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential implications for her Department's policies of the British Hair Consortium's report entitled Securing the future of UK hairdressing and beauty: the economic, fiscal and societal case for VAT reform, published in February 2025.

Answered by James Murray - Exchequer Secretary (HM Treasury)

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s second largest tax, forecast to raise £171 billion in 2024/25. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

Changes to the VAT threshold have to be carefully balanced considering the potential benefits to small businesses, the economy as a whole and tax revenues.