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20 January 2021
Posted by in Business

Coronavirus: the financial support available for your hair & beauty business

Your complete guide to the business grants, loans and other financial support for the hair and beauty industry during the coronavirus and COVID-19 outbreak.

Coronavirus: the financial support available for your hair & beauty business

Since March 2020, the government has announced a series of measures to help people cope with the financial fall-out of the coronavirus outbreak. As we’ve started lockdown 3.0, we want to keep you updated about all the financial support you’re currently entitled to - both for your hair, beauty or spa business and for you personally. We’ve rounded up the key points and will keep updating this blog based on the latest announcements.

  • Support for people on PAYE
  • Support for self-employed people
  • Deferral of VAT payments
  • Coronavirus Business Interruption Loan Scheme
  • Coronavirus Bounce Back Loan
  • 12-month business rate holiday
  • Cash grants
  • Help paying tax
  • Six-month mortgage holiday
  • Protection for renters
  • Credit cards
  • Sick pay

Expert tips for writing a winning hair and beauty salon award entry

Support for people on PAYE

The government launched the Coronavirus Job Retention Scheme in March 2020 which involves the HMRC reimbursing 80% of the salary of furloughed workers. (These are employees who are not working but are furloughed during the Coronavirus crisis and kept on the payroll, rather than being laid off.) This will be worth up to a maximum of £2,500 a month.

It was announced on 21st December 2020 that the furlough scheme is being extended by another 4 months, due to finish at the end of April 2021. The government has confirmed that furloughed employees will continue to receive 80% of their monthly wages up to £2,500 but will start to ask companies to share the cost of the scheme. Employees who weren’t previously on furlough are now eligible and can work on a part-time basis with 100% of wages paid during working hours while the rest of their wages are paid on furlough. Find out more here.

Support if you’re self-employed

In March 2020, the government introduced the Self-Employed Income Support Scheme which has just been extended following lockdown 2.0. If you’ve had a loss of income thanks to COVID-19, you can receive a taxable grant worth 80% of your average monthly profits each available for three month periods. These are paid in a single instalment, capped at £7500 and due to end in January 2021. Stricter eligibility criteria has been put in place for the recently announced third grant, the most important one being a declaration that your business has by impacted by reduced demand due to Covid-19.

This scheme is open to self-employed people who were trading in the last financial year, are still trading now, and plan to continue doing so through to next year.

How to apply: You can open your new claim from November 30th 2020. HMRC will contact you directly and have recently confirmed that most people affected should now have been contacted. If you believe you are eligible and have not heard from them the HMRC advises you to go on their website and use the checker tool.

Once contacted you should be provided with a time to apply between Wednesday 13th and Monday 18th May. You will have to fill in an online form to make the claim via an eligibility checker and once confirmed they will pay the grant directly into your bank account. You’re likely to receive the grant, backdated for three months, any time from the 25th May onwards.

Other financial support for self-employed people includes:

  1. Access to Universal Credit at a rate equivalent to Statutory Sick Pay, which is currently £95.85 per week.
  2. Tax deferral - you’ll now pay your normal ‘on account’ July tax bill in January 2021.

“For small and medium-sized businesses, the Chancellor has announced temporary business interruption loans of up to £5million with no interest due for the first six months.”

Expert tips for writing a winning hair and beauty salon award entry

Deferring of VAT payments

If you deferred VAT due between 20th March to June 2020, you now have the option of making smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, you can now make smaller payments up to the end of March 2022, interest free.

Coronavirus Business Interruption Loan Scheme

For small and medium-sized businesses, the Chancellor has announced temporary business interruption loans of up to £5million with no interest due for the first six months. The money is aimed at helping businesses pay wages, rent and buy supplies.

How to apply: The Coronavirus Business Interruption Loan Scheme will come from the British Business Bank’s accredited lenders including high street banks. The British Business Bank advises, “In the first instance, businesses should approach their own provider – ideally via the lender’s website.” It is now due to end on March 31st 2021.

Coronavirus Bounce Back Loan

This scheme helps small and medium-sized businesses borrow between £2000 and up to 25% of their turnover. This scheme is open to applications until March 2021. If you already have a Bounce Back Loan, but have borrowed less than what you were entitled, you can top up your existing loan to your maximum amount.

Local Restrictions Support Grant

Following the latest lockdown announcement on January 4th 2021, the chancellor announced a one-off grant up to £9000 to support businesses forced to closed. The amount per received per property varies depending on the size of the business:

  • £4000 for businesses with a rateable value of £15,000 or under
  • £6000 for businesses with a rateable value between £15,000 and £51,000
  • £9000 for businesses with a rateable value over £51,000

12-month business rates holiday

There will be a 12-month business rates holiday. This means the retail, hospitality and leisure industries won’t need to pay business rates for a year.

How to apply: You don’t need to do anything. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to take off the business rate charge.

Cash grants

Small companies in business premises with a rateable value (a measure of property values) between £15,000 and £51,000 can apply for grants of up to £25,000.

How to apply: You don’t have to do anything. Your local authority will write to you if you are eligible for this grant. Find out more here.

Smaller businesses that are currently eligible for Small Business Rate Relief (SBBR) can apply for a one-off cash grant of up to £10,000.

How to apply: You will be contacted by your local authority - you don’t need to apply. Find out more here.

Help paying tax

If you’re worried about being able to pay your tax because of the coronavirus pandemic, you’re advised to contact HMRC’s helpline on 0800 0159 559.

Six-month mortgage holiday

All banks should now offer you a six-month holiday from mortgage payments. This basically means deferring payments by six months if you are in financial difficulties arising from the coronavirus outbreak. This also means that for those offered a three-month mortgage holiday, you’re now granted an extra three.

Protection for renters

The government has announced emergency laws to protect private renters, including six-month notice periods and eviction suspensions from December 11th 2020- January 11th 2021 at the earliest. If an area is in a local lockdown that includes restrictions on gathering in homes, evictions can’t be enforced by bailiffs. The National Housing Federation has said they won’t evict tenants affected by coronavirus who fall behind on rent payments.

Universal Credit and Housing Benefit will also be increased so that the local housing allowance will cover at least 30% of the market rent in your area.

Credit cards

According to MoneySavingExpert, most banks and credit card firms have said they will allow emergency credit limit increases. Some will let you have repayment holidays and a few will waive fees for missed payments. Contact your credit card provider to find out what they can offer.

Sick pay

For employees… If you are employed, you are entitled to Statutory Sick Pay (SSP) from your first day off work, which can be up to £95.85 per week. You must earn at least £120 a week to be eligible for SSP.

For employers… The government will refund up to two weeks’ SSP for each eligible employee who has been off work because of COVID-19. The government says they’ll set up the repayment system for employers as soon as possible. Find out more here.

This page was last updated on 9th November 2020.

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