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The 2026 Autumn Budget raises the Small Business Rates Relief threshold and sets a higher National Living Wage from April 2027. British Beauty Council chief executive Millie Kendall welcomed measures for smaller firms and founders but said the Budget did not address youth employment or adequately support existing employers facing higher costs.
The UK’s 2026 Autumn Budget raises the Small Business Rates Relief threshold and sets a higher National Living Wage, but British Beauty Council chief executive Millie Kendall says it falls short on youth employment and support for established employers. The response matters to a sector dominated by small businesses, many of which employ workers at the start of their careers.
Chancellor John Healey announced that the threshold for Small Business Rates Relief will rise from £12,000 to £18,000. Kendall told Cosmetics Business that around half of roughly 50,000 salons already receive the relief, and the council estimates the higher threshold will take another 2,000 businesses out of business rates. The Government also plans a real-terms freeze on rates for businesses above the threshold and an extension of its business rates transitional relief fund.
The National Living Wage is scheduled to rise by 3.9% on 1 April 2027. The report gives the new rate as £13.21 an hour and says the increase would add £910 to the gross annual earnings of a full-time worker paid at that rate. The Budget says it will fund its package partly through action against non-compliance on online marketplaces and higher gambling taxes on higher-risk machine games. Stricter VAT compliance for online marketplaces is also intended to address offshore sellers undercutting UK retailers and brands.
The Budget document describes support for start-ups and scale-ups, including a tax offer for founders and their companies, public procurement measures and funding commitments for female entrepreneurs. Kendall welcomed the focus on new business development and access to finance. She said 86% of beauty industry innovators and entrepreneurs are female founders, while 95% of the sector consists of SMEs. Those figures and the Budget measures do not, by themselves, establish how much funding beauty businesses will receive.
Pressure on Salon Hiring
The measures have different implications for small premises and employers. Rates relief may lower costs for some salons and beauty retailers, while the scheduled wage rise increases hourly pay for workers covered by the National Living Wage and adds to employers’ payroll costs. For businesses with narrow margins, the balance between those changes could influence hiring plans and the ability to retain staff.
Kendall’s criticism centres on the absence of specific measures for youth employment and employers generally. That matters in beauty, where salons, retailers and other small firms can provide entry-level roles and work-based experience. The available source does not quantify how many young people the sector employs or estimate the Budget’s net effect on jobs, so the industry’s concern is a warning about potential pressures rather than evidence of a measured employment impact.
Support for founders may help new businesses, but Kendall drew a distinction between them and established firms already employing people. The Budget’s success for the sector will depend in part on whether rates relief reaches businesses facing immediate cost pressures and whether employers can absorb wage increases without cutting recruitment or hours.
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Rates Relief and Wage Changes
The Budget was delivered by Healey in the House of Lords on 28 October 2026. Its measures address several costs for high-street businesses, including business rates and wages, while the Government says it also aims to strengthen UK firms and the domestic workforce. The rates threshold change is a direct adjustment for eligible businesses; other proposals, including founder support and marketplace compliance, will depend on their design and implementation.
Industry responses were mixed. Tax lawyer Zain Hanif of Freeths called the higher threshold a boost for smaller retail, hospitality and leisure operators, while saying that details of proposed devolution would matter. Federation of Small Businesses national chair Tina McKenzie argued that the Budget did not make hiring more affordable or address energy bills. Knight Frank retail research partner Stephen Springham also described the anticipated wage increase as a further cost pressure for retail and hospitality operators.
“Overall, the Chancellor’s Budget reflects the stability we need, but was surprisingly void of any mention of measures to support youth employment or businesses who employ more generally.”
— Millie Kendall, chief executive of the British Beauty Council
Details Still Awaited
The supplied report does not set out the full eligibility rules, implementation details or individual business savings under the revised rates threshold. It also does not specify the value or distribution of the founder funding commitments, or explain how the proposed tax offer will work for beauty businesses.
The National Living Wage change is scheduled for April 2027, but the report does not describe any employer support tied to that increase. Nor does it provide an official estimate of the Budget’s effect on youth hiring, job numbers or hours in the beauty sector. Claims that the package will ease pressure, or that it does not go far enough, are assessments by industry representatives rather than confirmed outcomes.
Implementation Before April 2027
Businesses will need further guidance on eligibility and timing for the rates relief changes, the transitional relief extension and the marketplace VAT rules. The next clear date cited in the report is 1 April 2027, when the National Living Wage rise is due to take effect. Until implementation details and later employment data are available, the scale of relief for beauty businesses and any effect on recruitment remain uncertain.
Key Questions
What did the 2026 Autumn Budget change for small beauty businesses?
It raises the Small Business Rates Relief threshold from £12,000 to £18,000. The British Beauty Council estimates that about 2,000 additional businesses will be taken out of business rates.
When will the National Living Wage rise?
The increase is scheduled for 1 April 2027. The source report gives the new hourly rate as £13.21 and says the 3.9% rise would add £910 in gross annual earnings for a full-time worker paid at the rate.
Why does the British Beauty Council say the Budget falls short?
Millie Kendall welcomed rates relief and support for founders but said the Budget lacked measures for youth employment and employers more generally, including businesses facing higher wage costs.
Does the Budget include funding for beauty founders?
The Budget document refers to a tax offer for founders and their companies and funding commitments for female entrepreneurs. The report does not give a specific funding amount for beauty businesses or detail how they can access it.
Source: cosmeticsbusiness.com
