The Chancellor of the Exchequer, Rachel Reeves, delivered the 2025 Autumn Budget.
Reeves described the Budget as one focused on “fair taxes, strong public services and a stable economy.” The measures outlined signal increased operational costs for employers across the UK. Key announcements likely to impact aesthetic practitioners include the freezing of income tax thresholds until the end of the 2030/31 financial year.
This will inevitably cause fiscal drag as wages increase over the years slowly pushing those working in the aesthetics specialty into higher tax brackets. Salary-sacrificed pension contributions have also been capped at £2,000 per employee before tax, and any contributions above this threshold will be subject to both employee and employer National Insurance contributions.
Both the National Minimum Wage (NMW) and National Living Wage (NLW) have increased, with NLW rising by 4.1% for workers aged 21 and over. While NMW has risen by 8.5% for those aged 18 to 20, and by 6% for under-18s and apprentices. These changes could result in higher payroll costs for aesthetic clinics.
Those who are paid though dividends are also set to be impacted, as Reeves announced a 2% rise on the basic and higher rates of tax on dividends from April 2026. This could impact the take home pay for aesthetic practitioners who pay themselves via dividends.
Sue Thomson, CEO of medical aesthetic consultancy company SJ Partnership, commented, “None of the changes in themselves are dramatic, but together they do shape a landscape where clinics and practitioners will feel more pressure on both costs and confidence. Frozen thresholds, rising dividend taxes and persistent inflation means there may be less room to breathe for clinicians and clinic owners.”