With HMRC recruiting 5500 new compliance caseworkers to increase tax investigations, we asked salon specialist accountant Melanie Beech what this means for the salon industry, and what to do if you’re investigated.
As a hair or beauty salon owner, your focus is on clients, staff and running your business — not worrying about tax investigations. But HM Revenue & Customs (HMRC) is changing how it checks tax compliance, including hiring more people and investing more money into investigations. Understanding what’s changing can help you stay confident and prepared.
Why HMRC Is Investing in More Investigations
HMRC’s role is to make sure everyone pays the right amount of tax. The Government has made closing the “tax gap” a priority — this is the difference between the tax that should be paid and what actually gets paid.
In the October 2025 Budget, further funding was announced for HMRC to improve compliance work. Throughout 2025, HMRC also confirmed plans to recruit thousands of extra staff to focus specifically on checking tax returns, VAT, PAYE and self-assessment. This gives HMRC more time, people and tools to investigate errors and inconsistencies across all sectors — including hair and beauty.
How Much Is HMRC’s Compliance Team Growing?
HMRC has announced plans to recruit around 5,500 new compliance caseworkers, with many already in place and more joining over the next few years. These are staff whose job is to review tax returns, ask questions where things don’t look right, and open investigations where needed.
This doesn’t mean HMRC is watching every salon — but it does mean they now have more trained staff who can:
- Carry out test purchases
- Look more closely at cash-heavy businesses
- Compare tax returns with other information HMRC already holds
- Use online and digital data to spot inconsistencies
For salons, this can include checking whether reported income makes sense when compared with pricing, opening hours, number of staff or chairs, and even what’s being promoted on social media.
What This Means for Salon Owners
Most salon owners are honest and want to get things right. Many HMRC enquiries don’t start because of fraud — they start because of mistakes, missing information or something that doesn’t quite add up.
With more staff and better systems, HMRC is simply able to ask more questions than before. Even a straightforward enquiry can take time and feel stressful if your records aren’t clear or you don’t have support.
How You Can Protect Yourself
There are a few sensible steps every salon owner should consider:
Keep clear, accurate records
Make sure all income is recorded properly, including cash. Keep good records for expenses, payroll, VAT and any self-employed stylists. Up-to-date bookkeeping makes life much easier if HMRC ever asks questions.
Work with a salon-experienced accountant
Salons have unique challenges — VAT, chair rental, commissions, tips and different working models. An accountant who understands the hair and beauty industry can help you avoid common mistakes and deal with HMRC calmly and professionally if needed.
Have tax investigation insurance
Even if you’ve done nothing wrong, an HMRC enquiry can take hours of professional time. Tax investigation insurance covers the accountant’s fees if HMRC opens an enquiry into your tax, VAT or payroll. It gives peace of mind and protects you from unexpected costs, allowing you to focus on running your salon.
In summary: HMRC is expanding its compliance teams and increasing its ability to investigate tax issues. This doesn’t mean you should panic — but it does mean being prepared is sensible. Good records, the right advice and tax investigation insurance help you run your salon with confidence.
Melanie Beech FCPA, The Salon Expert Accountants
www.salonexpertaccountants.co.uk @thesalonexpertaccountants
