Britain's spa, beauty and hairdressing sectors lost one in five workers in 2025 — the steepest employment decline of any UK occupation — driving the UK Spa Association to back a cross-industry demand for VAT on professional services to be cut from 20% to 10%.

The trade body has signed an open letter, originally mobilised by the British Hair Consortium and supported by the British Hair and Beauty Consortium, addressed to the Chancellor ahead of the forthcoming Budget. The letter seeks a 10% VAT rate on professional beauty, spa, aesthetics, hairdressing and barbering services, and asks ministers to meet sector leaders before fiscal decisions are finalised.

What does the letter propose?

The open letter asks for a single instrument: a reduction of the standard VAT rate from 20% to 10% across five service categories — professional beauty, spa, aesthetics, hairdressing and barbering — alongside a pre-Budget audience with industry leads.

CBI Economics modelling cited by the campaign projects the rate cut would generate approximately £766m in additional VAT receipts by 2030 by stimulating transaction volume and protecting employment and business growth.

How steep are the job losses?

The campaign's headline figure — one in five employees lost from the combined sectors in 2025 — exceeds employment contractions recorded across the rest of the UK labour market in the same period.

Apprenticeship entry into the trade has collapsed by approximately 84% since 2015, severing the pipeline that operators rely on for therapist, aesthetician and stylist roles.

What does UKSA say?

Abi Selby, chair of the UK Spa Association, framed the rate cut as a structural intervention rather than a concession:

"The UK spa and wellness sector is a cornerstone of the nation's health, yet our operators are being constrained by an unsustainable tax burden alongside spiralling energy, employment and operating costs. Reducing VAT isn't just about financial relief; it's a vital strategic move to unlock business growth, secure the future of our industry and allow us to invest in the wellbeing of our communities."

Rachel Bevan, general manager of the UKSA, directed the call to operators and practitioners:

"Now is the time for our industry to come together and make sure our voice is heard. We know the pressures our industry is facing and we know that rising costs make it increasingly difficult for businesses to invest, grow and plan for the future. VAT reform could make a meaningful difference."

Bevan added: "If you work in the spa industry, this is your opportunity to speak up. The more of us who stand together, the stronger our message will be."

Collette Osborne, chair of the British Hair and Beauty Consortium and founder of Salon Owners United, said: "The UK spa industry has such a powerful voice and we need to use it collectively. This is about protecting the future of our industry, supporting businesses, encouraging growth and recognising the essential contribution that spa, beauty and wellness professionals make."

What it means for operators and treatment menus

For UK spa operators, the ask targets the dominant cost line above payroll and energy: the 20% VAT applied at point of sale on services. A reclassification to 10% would compress the consumer-facing price or, alternatively, widen operator margin without raising consumer prices — handing procurement teams and treatment-menu planners room to reconfigure pricing architecture going into 2025/26.

For chains and independents running apprenticeship pipelines, the 84% decline in starts since 2015 reframes the demand. A lower VAT rate, the campaign argues, would restore capacity to fund training roles and re-open entry pathways that have closed across the past decade.

What's next

The Chancellor's Budget date will set the campaign's first material test. Operators and trade body representatives will watch whether Treasury officials signal openness to a sectoral rate cut, and whether CBI Economics' £766m 2030 receipt forecast feeds into pre-Budget modelling. The next data point to track: any Treasury response to the open letter, or a written ministerial statement on service-sector VAT differentiation.