Beauty salon owners Allison and Wayne Hudson estimate that the National Living Wage increase will add £20,400 a year to their wage bill, despite hoping Chancellor John Healey's Budget would offer greater support to small businesses.
The couple, who run Faces Hair and Beauty in Colchester, Essex, employ 13 staff and estimate they will need to find an additional £1,700 a month to cover the increase. Allison, 60, said they were 'bitterly disappointed' with the Budget, claiming their salon would not benefit from the business rates measures and that they would not qualify for a £100 household energy payment.
Salon Owners Face £20,400 Estimated Annual Wage Increase
The National Living Wage for workers aged 21 and over is due to rise from £12.71 to £13.21 an hour on 1 April 2027, an increase of 50p. The Hudsons estimate that the change will add £20,400 to their annual wage bill, based on their own calculations. The actual cost will depend on employees' ages, working hours, existing pay rates and staffing arrangements.
'We are bitterly disappointed. There was nothing beneficial for us,' Allison said. She said the salon's tax burden makes it difficult for the couple to manage their finances during some months. 'We worked out that about 57p of every pound we take goes to the Government in some form of tax,' she said.
'Some months, when the VAT bill has to be paid, we don't take a salary, and we live on Wayne's state pension,' Allison added. The couple had hoped the Budget would provide more substantial support for small businesses facing rising employment and operating costs. However, they say their salon will not benefit from the business rates measures announced by the Government.
The Budget changes provide additional support for eligible retail, hospitality and leisure properties, but businesses must meet the relevant criteria to qualify. The Hudsons' reported exclusion reflects their individual circumstances rather than a blanket rule affecting all hair and beauty salons. Their criticism centres on the gap between the support they expected and the financial pressures they say remain unresolved.
Allison also expressed frustration that the couple would not receive the £100 household energy payment announced in the Budget. 'We naively thought the Chancellor would help businesses like ours, but we won't even qualify for the £100 cash payment for energy at our home,' she said. The payment is intended for eligible households in council tax bands A to D in England, with payments due from January 2027. The couple's eligibility has been checked against the applicable scheme criteria.
Small Businesses Question Budget Support
The Hudsons are among the business owners who say the Budget does not go far enough to address mounting operating costs. Rachel Sakels, 35, runs Meadow Lakes Caravan and Lodge Hire with her husband, Dan, whose business uses two diesel vans to maintain 95 holiday lets along the Lincolnshire coast. The couple travel around 20,000 miles a year, and Rachel says their monthly diesel costs have risen from £800 to £2,000.
Rachel said the Government's decision to freeze fuel duty would offer little help to their business. 'Freezing fuel duty will have no effect on us. We wanted to see a cut,' she said. The couple employ 15 part-time workers and currently pay £13 an hour, with Rachel saying they would look to increase wages to around £13.50 as the minimum rate rises.
'We will not be opening the champagne as this Budget has done nothing to help us,' Rachel said. Her comments contrast with those of other business owners who expect to benefit from the measures. John Fell, landlord of the Old Ship Inn in Limehouse, east London, said the removal of his £4,000 annual business rates bill would improve cash flow and give him greater confidence in the future.
The Government has said an additional 70,000 retail, hospitality and leisure businesses will qualify for zero business rates under the changes. The relief available to individual premises depends on the applicable rules, meaning the impact will vary across different businesses. While some owners expect to benefit, others say higher employment and operating costs will continue to put pressure on their finances.
For the Hudsons, the immediate challenge is managing their estimated £20,400 annual increase in wage costs while keeping their salon running. They say the Budget has failed to provide the support they need to ease the pressure on their business.
