UK spa and beauty leaders react to Budget

We ask some of the UK's business leaders what they thought of the recent Budget and how it will affect the industry

By Sarah Todd

05 March 2021

www.gov.uk/government/organisations/hm-treasury

UK Chancellor Rishi Sunak’s second Budget delivered a £65bn three-point plan to support both people and businesses through this “moment of crisis”.

The Chancellor’s immediate priority was to support those “hardest hit” with extensions to furlough; self-employed support; business grants; loans and VAT cuts for hospitality and tourism sectors.

For the first time ever, the newly-established Personal Care sector was mentioned specifically in a budget with a series of measures that will directly support the beauty, spa and hair industries.

In particular, with 65% of people who work in beauty being self-employed, according to the National Hair and Beauty Federation’s Industry Statistics 2020 Report, the extension to the Self-Employed Income Support Scheme will provide vital financial assistance in the months to come.

However, VAT for hair and beauty businesses was not cut, despite high-profile campaigning for targeted support from a ‘Covid coalition’ of BABTAC, the British Beauty Council, the NHBF and the UK Spa Association. These organisations have committed to continuing to work with both BEIS and the UK Treasury on changing this outcome “as a matter of urgency”.

We spoke to several beauty, spa and hospitality leaders to get their reactions on the Chancellor’s latest measures to help businesses.

Abi Selby, founder, Spabreaks.com

“We’re seeing increasing numbers of people seeking a restorative break from the turbulence of the past year and most recent lockdown, and while the support pledged in the budget is encouraging, the disconnect between spa services opening – with treatments available from the April 12, but thermal facilities only allowed to reopen from May 17 – will hinder the industry’s recovery as many spas are unable to reopen until they can do so fully.

“The effects of the pandemic will be felt long after we can return to the things we enjoy again – and with increasing mental health and wellbeing concerns, the spa and wellness industry will play a key role in the slow recovery from such impacts.

“It is becoming increasingly important to tackle some of these issues in society and the wellness industry needs to be promoted as the incredibly important, fulfilling and skilled profession it is – and be supported accordingly.”

Millie Kendall, MBE, CEO, British Beauty Council

“I welcome the budget announcements, but we will remain committed to campaign for a VAT reduction of the personal care sector.

“Businesses told us in June last year what would make their recovery more viable, and the vulnerable, larger VAT-registered businesses did – and still do – believe that a VAT reduction is key to this.

“It seems like a simple mechanism which would help activate recovery for a services based sector and help keep staff employed.”

Sarah Camilleri, founding editor and publisher, European Spa

“Behind every spa is a supply chain of dedicated businesses and talented professionals who have largely fallen between the gaps when it comes to economic support since the pandemic began.

“Although it is disappointing that the Chancellor did not cut VAT for beauty businesses, the budget has provided much-needed support for the newly-established Personal Care sector in other ways – from the extension of the furlough scheme to the recovery loan scheme and tax cut extensions.”

Adam Chatterley, chairman, UK Spa Association

“The new measures outlined by the Chancellor, which are most pertinent to our sector, have given a much needed lifeline to the spa industry as we prepare to reopen and restart our businesses.

“We are delighted with the extension of furlough, as this means that even with the social distancing measures and reduced capacity in place, this allows us to retain our workforce.

“Whilst we have not received the requested VAT reduction, the extension of business rates is welcomed. The Chancellor gave recognition to Caroline Noakes MP and the Personal Care sector was mentioned several times which is the time ever.”