On Wednesday 15 March, Chancellor Jeremy Hunt announced the Spring Budget in the House of Commons. The announcement included a cancelled energy price raise, increased funding for childcare and an increase in corporation tax. But what does the Spring Budget mean for barbers?
Jeremy Hunt has said the UK will avoid recession this year in his Spring Budget announcement, saying the economy is “on the right track.” The economy is forecast to grow by 1.8% in 2024 and 2.5% in 2025, while inflation is expected to fall to 2.9% by the end of this year, reports the BBC.
Changes that are likely to affect hairdressers and the industry include confirmation that there will not be a further hike in energy bills and that the hours of free weekly childcare for working parents is being extended to cover children below the age of three.
- The chancellor confirmed that he will cancel the planned £500 hike in average energy bills which was due to come into force next month.He also confirmed that the energy price guarantee will be extended for a further three months from April to June at its current level.
- Jeremy Hunt announced 30 hours of free weekly childcare for working parents is being extended to cover children below the age of three – and will eventually cover all children from the age of nine months to two years old. This will only be fully implemented by September 2025.
- The main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25%
- The UK will avoid going into recession in 2023.
- The lifetime allowance on tax-free pension contributions, which is currently £1.07m, will be scrapped.
- Fuel duty has been suspended for another year.
- Funding will be provided for up to 50,000 places on new voluntary employment scheme for disabled people, called Universal Support.
- Defence spending is being boosted by £11bn over the next five years.
The Industry’s Response
Commenting on the Spring Budget announcement today, Richard Lambert, Chief Executive of the National Hair and Beauty Federation said: “It can’t be a ‘growth Budget’ with no action on the VAT threshold which is acting as strong disincentive to growth for small and micro sector businesses.
“The UK can’t be the ‘best place in the world for female entrepreneurs’ with hair & beauty businesses clinging on by their fingertips and a gaping hole in employer support for apprenticeships. As a result of exponential increases in energy and business costs, some employers are now tragically being forced to let go apprentices because the numbers simply don’t add up anymore. So much for supporting the next generation of entry level British talent.
“Whilst the investment zones, support for childcare and ‘Returnerships’ may benefit some in the sector, there is little to offer immediate relief to businesses locked into extortionate energy contracts. We call on the Government and Ofgem to facilitate urgent talks with suppliers to at least allow business contract payments over a longer period of time.”