How to open a hair salon in the UK in 2026

The UK has around 50,400 hair, barbering and beauty businesses registered for VAT or PAYE, according to the National Hair & Beauty Federation, and in many of them the stylists are not staff at all but self-employed chair renters. That single choice decides who pays National Insurance, who owns the client and what the salon is worth when it is sold.

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No national licence is needed to cut hair for money in the UK. What a new salon does meet is HMRC, which published dedicated employment status guidance for hair and beauty on 9 May 2025, and in some areas a council registration that dates back decades. Tax rules below are UK-wide; council registration varies from one authority to the next.

1. Choose the staffing model: employed, chair rental or a mix
2. Test any chair rental against HMRC’s status indicators
3. Cost each chair under both models
4. Register with HMRC or Companies House and work out the VAT position
5. Find a site and check the business rates
6. Check council registration, byelaws and the music licence
7. Fit out around basins, water and drainage
8. Recruit, with the pay, apprentice and tips rules in place
9. Write agreements that match real working practice
10. Build the opening column: search, bookings and deposits

What is a hair salon business?

A hair salon business provides cutting, colouring and styling from premises, and HMRC’s VAT manual recognises three ways it can be structured: the salon employs its stylists and supplies the hairdressing itself; the stylists are self-employed but supply their work to the salon, which sells it on; or self-employed stylists supply their own clients directly and pay the salon for the space, the arrangement known as chair rental.

Which of the three applies is decided by how the salon actually works, not by what its contracts call it, a test that also separates a franchise from other arrangements across the beauty and wellbeing brands recruiting UK operators.

How to open a hair salon in the UK, step by step

The checklist, in the order openings usually run:

• Staffing model chosen: employed, chair rental or a mix
• Chair rental arrangement tested against HMRC’s status pointers
• Each chair costed under both models
• Business registered and VAT position worked out
• Site found, with business rates checked
• Council registration, byelaws and music licence checked
• Salon fitted out around water and drainage
• Team recruited, with apprentices, pay and tips rules in place
• Written agreements drafted to match real practice
• Opening clients and bookings built

Stage	What typically happens
Months 1 to 2	Staffing model chosen, chairs costed, business plan written, company or sole trader registered
Months 3 to 4	Site found and lease agreed, funding confirmed, council registration checked, agreements drafted
Months 5 to 6	Fit-out, booking system and insurance in place, stylists or renters recruited, soft opening
Months 7 to 12	Column built, chair occupancy and retail sales reviewed, prices and agreements adjusted

1. Choose the staffing model first

In a hair salon, the model drives everything after it: how the salon earns, what it pays in wages and VAT, and who controls the column. An employed team gives the salon the full takings and the clients, and the wage bill in quiet weeks. Chair rental gives the salon a rent and hands the takings, the clients and the risk of empty diaries to the stylist.

Margaux Salon, which runs three salons in north London with employed teams, wrote in February 2026 that employed stylists now make up only around 40% of the hairdressing workforce, and that moving its own business to a freelance structure would cut its tax bill by roughly 12% to 15% of turnover. It has stayed employed, citing training, VAT compliance and staff security.

2. Test the chair rental against HMRC’s pointers

Renting a chair does not on its own make a stylist self-employed. HMRC’s May 2025 guidance lists the signs it looks at, and points to its Check Employment Status for Tax tool for mixed cases:

Working practice	Points to employment	Points to self-employment
Hours and days	Set by the salon	Chosen by the stylist
Clients	Provided by the salon	Brought by the stylist
Prices and payment	A set rate paid by the salon	The stylist sets prices and the client pays the stylist
Products and tasks	Chosen and set by the salon	Chosen by the stylist, with no set duties
Supervision	Answerable to a salon manager	Not answerable to anyone else

HMRC’s officers go further than the contract. Its VAT manual tells them to test the written agreement against guidelines agreed with the hairdressing federation in October 1992, then to check that working practice matches, using salon rules, price lists, appointment cards and both sides’ accounts.

Agreements that mirror the guidelines while old practices continue are the case the manual describes, and in S Taylor (Machine Tools) Ltd, where employees had been converted to self-employed with agreements many never signed, the tribunal found for HMRC.

3. Cost each chair under both models

The worked example compares one chair for a year on illustrative inputs: an employed stylist on £13.00 an hour for 37.5 hours a week, paid for 52 weeks, taking £60,000 a year including VAT, against a renter paying £175 a week for 48 weeks.

One chair, one year	Employed stylist	Chair renter
Salon’s income from the chair	£50,000 of takings, net of VAT	£8,400 of rent
VAT the salon accounts for	£10,000 on the takings, once registered	£1,680 on the rent, if registered
Wage, employer pension and employer NI	£28,976	None
Left before salon rent, products and utilities	£21,024	£8,400
Who owns the clients	The salon	The stylist
Cover when the stylist is off	The salon’s problem	The stylist’s problem

The employed chair earns more for the salon, but only while the diary is full: the wage is due in a quiet week, and the takings carry VAT once the salon is registered. The rented chair earns less, at a fixed figure, and the income lasts only as long as the renter stays. For a small team the Employment Allowance can absorb most of the employer National Insurance, so the larger gap between the models is usually VAT and control rather than NI.

Chair rents are set salon by salon and published nowhere centrally, but adverts on the government’s Find a Job service show the range of terms: a Surrey salon offering a chair at £40 a day part-time in March 2026, a Nottingham salon charging a percentage of takings, and a Southport salon listing what the rent includes, from the station and backwash to reception, utilities, refreshments and the booking system. Those included services are what make the rent standard-rated for VAT.

For a chair rental hair salon, break-even is a number of chairs rather than a number of clients:

Line	Figure
Monthly overheads: rent, rates, utilities, insurance, booking system	£4,500
Monthly income from one chair at £175 a week	£758
Chairs let to cover the overheads	6

Every chair let beyond that is margin, and every empty one is a loss, which is why chair occupancy is the figure a chair rental salon watches week by week.

4. Register the business and work out the VAT position

A sole trader registers for Self Assessment with HMRC; a limited company is incorporated at Companies House. VAT registration is compulsory once taxable turnover passes £90,000. In an employed hair salon every client’s bill counts towards it.

Where stylists genuinely supply their own clients, only each renter’s own takings count towards their threshold, and the salon’s taxable turnover is the rent and services it charges them, plus any hairdressing the owner does personally. That difference is why the National Hair & Beauty Federation has campaigned for VAT reform to put employing salons and self-employed models on an equal footing.

5. Find the site and check the business rates

Hair salon premises are usually leased high street or parade units. From 1 April 2026, hairdressers are among the properties eligible in England for the lower retail, hospitality and leisure multipliers: 38.2p below £51,000 rateable value and 43.0p from £51,000 to £499,999.

The lease terms that matter most are the length, the break clause, and whether the landlord permits subletting chairs or rooms to self-employed renters.

Site type	What it gives	What it costs
High street	Visibility and walk-ins	Highest rent and rates, more competition
Residential parade	Regular clients close to home, lower rent	Little passing trade
Shopping centre	Footfall the landlord generates	Service charge, fixed opening hours
Upstairs or rear unit	Lower rent for the same floor area	Relies on bookings, not walk-ins

6. Check council registration, byelaws and music

There is no hair salon licence, and guides that list a council “business licence” or a premises licence for hair colouring describe regimes that do not apply to hairdressing. What exists is local. Some councils require hairdressers and barbers to register their business and premises: Bury and Bournemouth do so free of charge, and London boroughs such as Enfield register them under section 21 of the Greater London Council (General Powers) Act 1967.

Others, such as Tamworth, state that the Deregulation and Contracting Out Act 1994 removed the requirement. Where a council has made byelaws under section 77 of the Public Health Act 1961, they cover the cleanliness of the premises, instruments, towels and equipment, and of the hairdressers themselves; where registration applies, the certificate and byelaws are displayed in the salon. Playing music, including a radio for staff, usually needs TheMusicLicence from PPL PRS.

7. Fit out around water and drainage

The fit-out is driven by plumbing: backwash basins, hot water, drainage and ventilation decide where the stations go. A unit that was previously a salon usually brings much of this with it, and Toni&Guy’s franchise page notes that taking over an existing salon can open sooner than a new site.

8. Recruit, train and set the pay rules

No qualification is required by law to cut hair or own a salon. The Hairdressers (Registration) Act 1964 set up the Hairdressing Council and a register of hairdressers covering England, Wales and Scotland, not Northern Ireland, open to those who have served an apprenticeship or completed an approved course. Registration is voluntary: the Act creates no offence of practising unregistered. Registered hairdressers can use the State Registered Hairdresser title, and the Council’s disciplinary committee can remove a name from the register.

• Pay: the National Living Wage is £12.71 an hour at 21 and over from 1 April 2026, £10.85 at 18 to 20, and £8.00 for apprentices under 19 or in their first year
• Tips: since 1 October 2024, employers in England, Scotland and Wales must pass on all tips paid through the business without deductions, under a written tipping policy where tips are regular, and tips cannot count towards the minimum wage
• Apprentices: hairdressing remains one of the most popular apprenticeship standards for under-19s, with 3,800 to 4,500 starts a year, but a CBI Economics study for the British Hair Consortium found hair and beauty apprentice numbers fell from 16,000 to 6,000 between 2016 and 2023, a fall the federation links to fewer employing salons able to take apprentices on

9. Write agreements that match real practice

For chair rental, the guidelines in HMRC’s manual describe what a defensible arrangement looks like. Among them:

• Clients: the stylist’s client details, records and addresses are the stylist’s property, and complaints go to the stylist
• Money: takings belong to the stylist, whether or not they are collected centrally, and any money held is accounted for to them
• Prices and hours: the stylist sets their own prices, opening times and holidays, and buys products from any source
• Insurance: the stylist insures their own business, including public liability
• Charges: the rent, the services the salon provides and the VAT on them are set out in writing, with notice and termination terms

10. Build the opening column

A new hair salon with employed stylists starts with an empty column the salon has to fill through its own marketing and walk-ins. A chair rental salon fills as fast as it recruits renters with clients, and a renter who arrives with a following can leave with it.

• Search: a Google Business Profile with accurate hours, photographs of finished work and a direct booking link sends local searches to the salon’s own diary
• Booking platforms: marketplaces bring new clients at a price; Margaux Salon puts their first-visit commission at 20% to 35% of the service price, charged on the full bill
• No-shows: online booking with a deposit for long colour appointments protects the most expensive hours in the column
• Retail: shampoo, conditioner and styling products sold at the chair add margin without adding chair time, in an employed salon; a renter sells their own

Types of hair salon

Model	How it works
Employed salon	Stylists on PAYE; the salon owns the clients and the takings, and carries the wages
Chair rental salon	Self-employed stylists pay rent or a commission for the space and keep their own clients
Mixed salon	Employed stylists and renters side by side, with separate tills, prices and agreements
Barbershop	The same three models; growth in the first half of 2025 was led by barbershops, beauty and nail salons
Mobile or home-based	No premises; the stylist is self-employed and registers for Self Assessment

How much does it cost to open a hair salon?

No official UK average start-up cost exists for a hair salon. What can be stated is what one named franchisor publishes and what the statutory lines cost.

Cost line	Published figure
Franchised salon	Toni&Guy: franchise partners typically invest £40,000 to £60,000, with routes from about £10,000
Independent salon	No official figure; driven by the site, the fit-out and the staffing model
Council registration	Free where required, for example in Bury and Bournemouth
Business rates	Rateable value × 38.2p below £51,000, or 43.0p up to £499,999, 2026/27
Staff	National Living Wage £12.71 an hour at 21 and over; employer NI 15% above £5,000, less the £10,500 Employment Allowance; 3% employer pension on qualifying earnings

The lines that move a start-up budget most are:

• The lease, including any premium and the rent deposit
• The fit-out: basins, plumbing, drainage, stations and lighting
• Staff wages, or the recruitment of renters
• Opening stock of colour and retail products
• Booking system, insurance and professional fees
• Working capital for the months before the column fills

Opening a hair salon on a low budget

The cheapest routes into salon ownership avoid a full fit-out. A common route is to rent a chair first to build a following, to start mobile or from a home studio, which in Bournemouth still has to be registered with the council, or take over an existing salon with the basins and stations already in place. Start Up Loans lends up to £25,000 per applicant at a fixed 7.5%, unsecured.

What changes when opening a hair salon in London

Hairdressing itself is not licensed in London, but anything beyond it often is. Under the London Local Authorities Act 1991, salons offering nails, massage, ear piercing or similar treatments need a special treatment licence from the borough, renewed every year: Tower Hamlets charges £700, or £900 where IPL is offered, and Barking and Dagenham warns of fines up to £5,000 for operating without one. Business rates bite harder too: Margaux Salon reported business rates at one of its London sites set to rise by more than 30%.

Hair salon franchise opportunities in the UK

Franchising in the UK is governed by general contract law, with no franchise statute and no statutory disclosure, which leaves the franchise agreement carrying the weight a disclosure filing carries elsewhere, so entry figures are taken only from each brand’s own pages:

• Toni&Guy: its franchise page states that partners typically invest between £40,000 and £60,000, with routes from about £10,000, on an initial five-year agreement with an automatic right to renew while the salon operates within its terms, and around six months to open a new salon
• Rush: its franchise page states it has 12 franchisees active in the UK but publishes no entry figure; investment numbers attributed to it elsewhere come from directory listings and are not used here

The practical difficulties operators report

• Cost pressure: in the federation’s Straightening Out the Costs report, 72% of businesses planned to raise prices after the 2024 Budget, and 19%, about 9,370 businesses, planned to move to a self-employed model
• Losses: the federation’s April 2025 survey found 21% of salons and barbershops operating at a loss, up from 17% in January
• A shrinking workforce: the federation’s figures show the sector workforce fell by 7.5% in 2023
• Renters leave with clients: a chair rental salon’s income depends on renters staying, and the clients follow the stylist
• Status drifts: rules about hours, prices or products added after opening can turn a compliant chair rental into one HMRC would challenge
• Survival is better than reputation suggests: the federation reports 90.6% of businesses survive their first year and 62.5% reach five years

The bottom line

Opening a hair salon in the UK needs no national licence, but it does need a decision on staffing that shapes the rest of the business. An employed salon keeps the takings and the clients and carries the wages and the VAT; a chair rental salon collects a fixed rent, charges VAT on it once registered, and owns neither the clients nor the takings.

HMRC judges which one exists from working practice, not the contract alone, and the same choice decides what the salon is worth on exit. Brands offering a ready-made model instead can be compared among those recruiting operators in the UK.