The 24% Bankruptcy Claim That Can't Exist

The Public Claim

In February 2024, Modern Barber published an article titled "Salon And Barbershop Owners Ask Government For An Immediate Cut In VAT." The piece featured Toby Dicker from The Chapel Salon in Tunbridge Wells, who stated:

This is a striking claim. The hair and beauty sector represents approximately 1% of the UK workforce (roughly 400,000 workers out of 33 million employed). If 24% of all personal bankruptcies came from this sector, it would suggest an extraordinarily high bankruptcy rate - roughly 24 times higher than the general population.

The statistic has been used in advocacy for emergency VAT cuts and appears in media coverage presenting the sector as facing unprecedented crisis. So where does this 24% figure come from?

What Data Actually Exists

To verify this claim, we submitted Freedom of Information requests to the Insolvency Service asking for personal bankruptcy data broken down by occupation or sector.

The response was clear and definitive:

What About The London Gazette?

Individual insolvency notices are published in the London Gazette, and these do include occupation information. For example:

• Victoria Shelley - "Hairdresser"
• Bethany Tappenden - "hairdresser"
• David Audsley - "Hairdresser"

However, this information is not aggregated into statistics. The Gazette publishes individual notices; the Insolvency Service doesn't compile these into sector-level statistics showing "X% of bankruptcies from sector Y."

Someone could theoretically read through thousands of Gazette notices, manually count occupations, and create statistics. But there's no evidence this analysis has been done, and it certainly isn't an official government statistic.

Company Insolvencies: The Real Numbers

While personal bankruptcy data by sector doesn't exist, the Insolvency Service does track company insolvencies by SIC code. Here's what the data actually shows:

Period	Hair & Beauty (SIC 96020)	All Sectors	Hair & Beauty as %
Jan 2015 - April 2025	111	8,465	1.31%
2023	485	26,614	1.82%
2022	430	23,407	1.84%
2021	217	14,927	1.45%
2020	180	13,424	1.34%

Source: Insolvency Service, Companies House data via FOI

The sector represents between 1.31% and 1.84% of company insolvencies depending on the year examined. This is roughly proportional to the sector's share of the overall economy.

This is not 24%.

Why This Matters

The 24% statistic has been used in lobbying for emergency government intervention. The Modern Barber article states:

The article references:

• Salon Employers Association asking members to contact MPs
• Industry leaders like Errol Douglas calling for "one voice"
• MPs responding to constituent concerns about sector crisis

When advocacy is based on statistics that don't exist, it raises questions about:

• Whether MPs and government officials are receiving accurate information
• Whether the case for intervention is being overstated
• Whether legitimate sector challenges are being undermined by exaggerated claims
• Whether salon owners themselves are being misled about the scale of problems

The Pattern of Impossible Statistics

The 24% bankruptcy claim is part of a broader pattern of statistically impossible or unverifiable claims used in sector advocacy:

Each statistic creates impression of unprecedented crisis. Each appears designed to generate urgency for government intervention. Each is either mathematically impossible or based on data that doesn't exist.

How This Could Happen

How do statistics that don't exist end up in public advocacy? Possible explanations include:

• Confusion between company and personal insolvency: Someone may have seen company insolvency figures and incorrectly described them as personal bankruptcies
• Misremembering or distorting actual figures: The real 1.31% may have been misremembered or deliberately inflated to 24%
• Anecdotal impressions presented as data: High bankruptcy visibility within the sector may have created impression this represents large national share
• Uncritical repetition: Once stated by one person, the figure may have been repeated without verification

Whatever the origin, the statistic has been presented as fact in media coverage and used to support calls for emergency government action.

What We Can Actually Say

Based on official data, here's what we know about sector financial distress:

• Company insolvencies: Hair & beauty represents 1.31-1.84% of total company insolvencies, roughly proportional to sector size
• VAT-registered businesses: Numbers have remained relatively stable (13,200-14,300 over 2018-2022)
• Total workforce: HMRC data shows 398,000 workers in 2022-23, up 2.1% from 2018-19
• Employment model shift: Significant movement from traditional employment to self-employment models

These figures show a sector undergoing structural change, particularly in employment models. They don't show the apocalyptic collapse suggested by claims of "24% of bankruptcies."

The Real Challenges

This doesn't mean the sector faces no challenges. Legitimate concerns include:

• VAT threshold effects: Creating incentives for businesses to remain small
• Disguised employment: Tax compliance issues around chair rental models
• Rising business costs: Rent, rates, utilities affecting profitability
• Skills and training: Apprenticeship funding and qualification pathways

These are genuine policy questions worthy of serious debate. They don't require fabricated statistics to justify attention.

When advocacy relies on impossible numbers, it risks:

• Undermining credibility when the statistics are challenged
• Distracting from real issues that require genuine solutions
• Creating false expectations among salon owners about crisis-level intervention
• Misleading policymakers about the actual scale and nature of challenges

Manual Verification: Counting The Gazette

Since the Insolvency Service doesn't aggregate London Gazette occupation data, we conducted a manual count of individual insolvency notices published in 2025 to verify whether the 24% claim could possibly be accurate.

What This Actually Means

According to Insolvency Service statistics, total personal bankruptcies in the UK run approximately 20,000-25,000 per year. Using our manual count:

To reach 24% of personal bankruptcies, the sector would need approximately 4,800-6,000 bankruptcies per year. Our manual count of London Gazette notices shows roughly 30 in partial-year data, or perhaps 300 extrapolated to a full year with generous assumptions.

The 24% claim is off by a factor of 16-20x.

The Verification Process

Unlike some statistics that are difficult to verify, this one is straightforward:

Anyone can replicate this verification. The Insolvency Service responds to FOI requests. Companies House data is publicly available. The London Gazette is searchable online. The arithmetic is simple.