8 March 2017

The NHBF has welcomed chancellor Philip Hammond’s announcement in the Budget today (March 8) of extra support for businesses affected by next month’s business rates revaluation.

The chancellor pledged to help small businesses facing the loss of Small Business Rate Relief because of the revaluation of the tax on business properties.

Under a package of transitional relief, Mr Hammond said any increases in rates bills as a result would be capped to a maximum of £600, and local authorities would be given £300m to set up special funds to support “individual hard cases”.

NHBF chief executive Hilary Hall said: “Knowing there will now be a cap on any increase in their bill will be reassuring for many small salon and barber businesses facing real hardship because of suddenly finding themselves ineligible for Small Business Rate Relief.“However, we are disappointed that the chancellor did not use the opportunity of the Budget to set out any plan for a more fundamental reform of business rates.

“Mr Hammond has indicated he is open to reform in the ‘medium term’. We’d argue the speed of change on the high street – and the continuing threat from online and out-of-town retailers – means there is now in fact an urgent need for business rates to be rethought.”

The NHBF also gave a cautious welcome to the chancellor’s announcements of the reform of technical education, especially the establishment of new “T-levels” for 16-19-year-olds and a requirement for a “high quality” three-month work placement for every student.

“Hair and beauty salons and barber shops have long complained about students leaving college qualified on paper but in reality, they aren’t ‘salon ready’. Anything that helps to better prepare potentially talented youngsters for the world of work is welcome,” said Hilary Hall.

“The idea of mandatory work placements is also positive, but we’d like to see the detail of how these will work in practice. Will salons, for example, be paid for taking on these extra trainees or will they, in effect, be picking up the tab for colleges? And how, and where, are colleges going to find enough salons – many of them already hard-pressed – to take on all these extra work experience trainees?”

The chancellor also shook up the system of National Insurance Contributions (NICs) for people who are self-employed, a change that could have ramifications for chair and room renters and salon owners operating as sole traders within the industry.

From next April (2018), the two main NICs paid by self-employed workers will change. Class 2 NICs (paid by those making a profit of more than £5,965 a year) will be abolished but Class 4 NICs (paid by those making a profit of more than £8,060 a year) will go up significantly.

The main rate of Class 4 NICs will increase by 1% to 10%, with a further 1% increase in April 2019, said Mr Hammond. This would end the “dramatically different” tax treatment of self-employed people, he added.