Hairdressing and beauty treatment in the UK: industry profile

The hairdressing and beauty treatment industry continues to make a significant contribution to the UK’s economy – according to IBISWorld, the industry’s revenue has grown at a CAGR of 0.6% over the past five years, to reach an estimated £5.8bn in 2025.

Most businesses operating in this sector are small or micro in size. Whilst there are some large chains and franchise brands, a recent report from the National Hair & Beauty Federation (NHBF) shows that, as of 2024, nearly 64% of hair and beauty businesses had an annual turnover of less than £99k, with more than 80% employing fewer than five people and 95% fewer than ten people.

NHBF data also shows that a significant proportion – 58% – of people working in the hair and beauty sector are self-employed. Many run a single-site, owner-managed salon or work as freelance stylists. Those who are freelance may rent a chair or a room in a high street salon, run a home salon, or operate mobile/home-visit services.

Like many industries, the sector experienced a downturn during the COVID-19 pandemic, but has subsequently recovered robustly. However, businesses in this sector have faced significant inflationary pressures in recent years, particularly in terms of employment costs.

A range of key statistics for the period 2019-2023 are set out in the table below.

The UK hairdressing and beauty-treatment market spans a wide range of services – from hair cutting, styling and barbering to manicures, pedicures, facials, tanning and electrolysis.

Traditional hair salons remain significant, although they have lately reduced in number – the Guardian report that the overall number of hair salons in Great Britain fell by 319 during the year to 1 July 2024. Barbershops are a fast-growing sub-category, having seen an increase of 304 units in H1 2023 alone, according to the Local Data Company. Other services such as nail, spa, and non-surgical cosmetic treatments are also increasingly significant – the Guardian report that more than 1,000 beauty salons and nail bars opened in Great Britain in the year to 1 July 2024.

Data compiled by the Office for National Statistics (ONS) shows that, geographically, hairdressing and beauty salons cluster in urban and densely populated areas. London is by far the largest hub – 8,695 salons (over 17% of the UK total) were based there in 2024. The South East and North West follow, with 6,135 and 5,890 salons respectively. More sparsely populated regions have far fewer: for example, the North East had 2,110 salons in 2024.

Commentators have noted a number of key trends which are likely to shape the course of the industry’s development in the coming years, presenting both challenges and opportunities. Some of the most significant of these are outlined below.

The industry – particularly the hairdressing sub-sector – is grappling with escalating costs and acute staffing shortages.

According to the NHBF's ‘Straightening out the costs’ report (January 2025), labour accounts for around 60% of hair and beauty businesses’ expenses, making the industry especially vulnerable to increases in employment costs. Furthermore, as the British Hair Consortium (BHC) have noted, the sector’s service-based nature means limited opportunities to reclaim VAT on input costs, further exacerbating the issue.

Recent government measures, including changes to minimum wage rates and employer National Insurance contributions (NICs), are projected to add £139 million in costs, contributing to a forecasted 15% drop in profits and a £20 million fall in turnover.

These measures stand to compound pre-existing issues in the sector. According to ONS data, median hourly pay for hairdressers and related occupations rose by 10.1% in 2024, intensifying pressure on margins and prompting price hikes that risk dampening consumer demand. Meanwhile, workforce numbers have been dwindling, seeing a decline of around 18,500 (7%) in 2023, and of 16,500 (7.5%) in 2024. Hairdressing apprenticeship enrolments in England have fallen by nearly 70% since 2015, the Guardian report.

75% of respondents to the NHBF’s January 2025 State of the Industry Survey reported worsening recruitment challenges. Such challenges threaten long-term sustainability and drive up competition for skilled practitioners.

In recent years the proportion of hair and beauty practitioners who are self-employed has increased markedly. The BHC note that in 2006, self-employment accounted for only 46% of sector-wide employment. By 2024 this figure had increased to 58%, according to NHBF data.

This trend has a number of potential implications. A 2021 report published collaboratively by a number of industry bodies highlighted that the growth of the self-employed business model poses challenges with regard to visibility, standards and quality of service. For example, self-employed individuals generally do not take on apprentices, meaning that education and training in the sector will need to adapt.

In this context, the ‘rent-a-chair’ model – whereby hairdressers, barbers, or beauticians rent a chair or space within an established salon to operate their own independent business – is increasingly significant. In March 2025 the Financial Times reported on concerns about the potential of ‘rent-a-chair’ salons to undercut traditional salons, threatening their viability.

In the face of the rising cost pressures, staff shortages and competition from freelance practitioners outlined above, traditional hair salons have decreased in number in recent years. As noted above, the overall number of hair salons in Great Britain fell by 319 during the year to 1 July 2024, as reported by the Guardian.

Summarising the results of its January 2025 State of the Industry Survey, the NHBF state that “[d]ue to the sector shift to self-employment, many businesses find it challenging to run a profitable and successful salon that employs staff.”

In contrast to the recent fortunes of traditional hairdressing salons, dedicated nail and beauty treatment spaces have lately increased in number. As noted above, the Guardian report that more than 1,000 beauty salons and nail bars opened in Great Britain in the year to 1 July 2024.

However, those operating in this sector must navigate an evolving regulatory environment. For example, a new licensing scheme for aesthetic practitioners carrying out non-surgical cosmetic procedures (such as dermal fillers) is set to be introduced under the Health and Care Act 2022. The Joint Council for Cosmetic Practitioners (JCCP) has published a set of FAQs on the Act.

Marketing, appointment scheduling, and client management functions in the industry have been transformed in recent years by new digital services and trends. For example, in November 2023 Hairdressers Journal reported that a majority of British salon appointments are now made outside opening hours, via online booking systems. Meanwhile, social media platforms are increasingly crucial sites of marketing activity for businesses in the sector. ‘Influencer marketing’ is now commonplace, with the NHBF compiling a list of the industry’s ‘Top 100 Influencers’ for 2024.

Such digital platforms and services may enable independent practitioners to build and maintain their client bases more effectively than in the past, when they may have found it more difficult to compete with larger enterprises.

Whilst it is beyond the scope of this profile to provide in-depth information on the tax treatment of hairdressing and beauty treatment businesses, certain pointers as to key issues are set out below.

For one, VAT considerations may be of special relevance in this sector. Many small businesses operate just below the VAT registration threshold, meaning that careful monitoring of turnover is essential. Recently, industry bodies such as the NHBF have called for VAT reform to level the playing field between employers and the self-employed in the sector.

Another significant matter is that of employment status. As noted above, it is common for individuals to operate as self-employed stylists or therapists, renting a chair or treatment room in a salon. However, HMRC may challenge such arrangements where there are indicators of employment, such as control over working hours or pricing. Where an employment relationship exists, the salon may be required to operate PAYE and account for National Insurance contributions.

In addition, where services are delivered from home or on a mobile basis, practitioners may wish to consider the tax implications of running a business from home, and/or explore their options for deducting eligible travel costs.

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• British Association of Beauty Therapy & Cosmetology (BABTAC)
• British Barbers Association (BBA)
• British Beauty Council
• British Hairdressing Association (BHA)
• Federation of Holistic Therapists
• Federation of Nail Professionals
• Freelance Hairdressers’ Association
• Guild of Beauty Therapists
• Hair & Barber Council
• Hair and Beauty Industry Authority (Habia)
• National Hair & Beauty Federation (NHBF)