Written Submission from Collinge & Co Limited (SBS0074)
15 July 2025 Private & Confidential
Re: Small Business Strategy
To whom it may concern
Collinge & Co is a fourth-generation family hairdressing business, founded in 1940. Based in the North West of England, we have four salons, a training centre and employ 80 people.
Collinge & Co Training is a specialist independent training provider of hairdressing apprenticeships, we are the largest provider of hairdressing apprenticeships in the Liverpool City Region and have been training apprentices for over 80 years. We have been involved in National Vocational training since it was launched in 1984. We currently train approximately 130 apprentices for 80 local salons throughout the region. Throughout these years we will have trained over 4000 apprentices.
We are very proud of this achievement and the impact we have had in the community by means of job creation in the North West. Last year, we were awarded Outstanding in all six areas from Ofsted as a result of our continued high standards and commitment to training young people.
However, with the steady rise in self-employment in hairdressing, these past few years have been challenging for recruiting apprentices. This is a consequence of fewer salons offering employment status, which correctly is a requirement to employ an apprentice.
This year, we have a capacity of 64 places on our Level 2 programme. From the over 300 applications we received, only 49 apprentices have been enrolled onto the programme, because we cannot find enough salons willing to employ apprentices. 94% of these apprentices are aged 16 or 17, because salons are reluctant in employing older apprentices due to the increased wage costs in the second year of their apprenticeship. Over a two-year period, it costs almost £5000 more to employ an 18 year-old apprentice versus a 16 year-old apprentice – for many salons, this increased cost can be the difference in turning a profit.
The October Budget has made the situation considerably worse. Already, we have seen salons we train for close or move to a so-called “self-employed” model, where all workers fall under the VAT threshold and Employer National Insurance Contributions are avoided.
With the majority of hairdressers being self-employed (70%), the increase in NIC and wage costs will have a disproportionate effect on a minority of employer-based salons. I believe in contributing through paying taxes, but the recent budget appears to unfairly target employment. It also avoids addressing the issue of tax avoidance in our industry.
The impact of the budget for our own company is as follows. A 37% increase in Employer National Insurance Contributions, an extra £62,000. An increase in Business rates of £21.000. An increase of 16% in wages for the 15 Hair Professional apprentices we employ (last year was a 21% increase). In a business such as hairdressing, where our salon wage costs are over 60% of turnover, these are huge costs to bear. The NIC and rates increases alone equate to 2.2% of our turnover.
Prior to the Budget our business was projected to make a small profit next year but nothing like enough to cover in excess of the costs outlined above. For our business to survive we have made significant changes.
Since the Budget, we have closed our Liverpool City-Centre based office, made two redundancies from our small head-office team and closed a salon making seven people redundant. We have cut our apprenticeship intake by 33% and cut their hours.
As well as these job losses and salon closure, we have also increased our prices by 8%, and this is all just to cover the increases from the Budget. I think it is grossly unfair that VAT in hairdressing applies to less than 15% of salons and that these salons will also carry the burden of the increased Employers NI that the “self-employed” model does not. The increase in prices will have a disproportionate effect on a minority of salons, most likely resulting in a loss of clients. Is it any wonder more and more salons are turning towards self employment? This is not a route we want to explore, as our values have always been to train and nurture the next generation – but we know many salons countrywide that are now considering this option.
The salon we have closed had been trading for 55 years and has been an integral part of the town and local community. I believe the town is now going to be left without a salon that offers apprenticeship training.
In line with the Salon Employers Association and the British Hair Consortium I fully support their calls for tax reform for high-wage service industries by lowering the VAT rate and threshold for services (similar to the Irish model). This fundamental reform would be a start as it would address the inequality across our sector, save salons that generate employment and reverse the decline in apprenticeships.
Thank you for taking the time to read this and I would very much appreciate any support and introductions you can assist with in getting this issue addressed more fully.
Yours sincerely
Collinge & Co Limited
Confidential Page 3 of 3
Collinge & Co Limited Castle Chambers