New and extended financial help schemes for hair and beauty specialists in the UK

New and extended financial help schemes for hair and beauty specialists in the UK

The government has announced a few new help schemes for businesses all across the United Kingdom, as well as extensions and adjustment of the existing ones. We have gathered advice on the ones relevant to our industry. The below-mentioned grants and programs are dedicated to both salon owners with employees and solo specialists. Without any further ado, let’s see what you can do to receive financial support, what the current situation is with the loan schemes introduced earlier this year, and whether or not the eviction ban applies to the hair and beauty industry.

A new Job Support Scheme

The government has announced a new help scheme dedicated to businesses who face a smaller demand during the winter months due to the COVID-19 outbreak. Under this scheme, the government will contribute to the wages of employees who are working fewer hours than normal and would otherwise struggle with keeping their job.

How does this scheme work?

The business taking part in this scheme will continue to pay its employees, but the burden of hours not worked will be split between the employer, the government (through wage support) and the employee (through a wage reduction). The government will pay a third of hours not worked up to a cap, with the employer also contributing a third. Thanks to this, employees will be able to earn a minimum of 77% of their regular wages, where the government contribution has not been capped.

What’s the goal of this scheme?

The main goal of the Job Support Scheme is to protect viable jobs in businesses that may struggle during a slow season. The government wants to focus on businesses that are being impacted by the COVID-19 outbreak, while still being able to support their employees, need more time and some backing to recover.

Who is eligible for it?

When it comes to businesses who can claim the grant, the criteria are as follows:

You need to have a UK bank account and UK PAYE scheme.
If you run a small or medium-sized enterprise, no financial assessment is necessary.
If you run a large business, you will have to meet a financial assessment test. The scheme is only available for businesses whose turnover has lowered due to the difficulties caused by the COVID-19 outbreak. Moreover, the government expects that large-scale employers will not be making capital distributions, such as dividend payments or share buybacks, whilst taking advantage of the scheme.

When it comes to employees who can take advantage of the scheme, the criteria are as follows:

You must be on an employer’s PAYE payroll on or before 23rd September 2020.
For the first three months of the scheme, you have to work at least 33% of your usual hours. After 3 months, the government will consider whether to increase this minimum hours threshold.
You can claim the support on and off and do not have to work in the same pattern each month - however, each short-time working arrangement must cover a minimum period of seven days.

Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.

How long will the support last?

The scheme will begin on 1st November 2020 and will run for 6 months, until April 2021.

How to apply for this scheme?

Employers will be able to make a claim online through the government website (gov.uk) from December 2020.

Further information

You can find all the available information on the new Job Support Scheme on the government’s website. It is said that more detailed guidance will follow shortly, so make sure to stay updated!

Self-Employment Income Support Scheme grant extension

If you are currently eligible for the Self-Employment Income Support Scheme and are actively continuing to trade, but face difficulties due to the lower demand for your services caused by the COVID-19 outbreak, you can take advantage of the grant extension.

How does this scheme work?

You will receive two grants, paid in two lump sum instalments, each covering a three-month period.

The first instalment provides approximately the same level of support for the self-employed as is being provided for employees through the Job Support scheme. It will cover a three-month period from the start of November until the end of January. It will take the form of a taxable grant that will cover 20% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.

The second instalment will cover a three-month period from the start of February until the end of April. The level of the second instalment is yet to be determined.

Who is eligible for it?

The criteria are as follows:

You need to be eligible for the Self-Employment Income Support Scheme (however, you do not have to have claimed the previous grants).
You have to declare that you are currently actively working and intend to continue to trade.
You also have to declare that you are impacted by reduced demand due to the COVID-19 outbreak in the qualifying period (namely, between 1st November and the date of the claim).

How to apply for this scheme?

HMRC will provide full details about claims and applications in guidance on the government website (gov.uk) in due course.

Further information

You can find all the available information on the new Self-Employment Income Support Scheme grant extension on the government’s website. There will be more information available soon so stay tuned for that!

“Pay As You Grow” scheme

“Pay As You Grow” is an adjustment to the Bounce Back Loans scheme. Businesses who took advantage of that loan will be given the option to repay it over a period of up to ten years, nearly halving the average monthly repayment. Moreover, interest-only periods of up to six months and payment holidays will be available.

Furthermore, in case you took advantage of the Coronavirus Business Interruption Loan scheme, you will be able to extend the length of loans from a maximum of six years to ten years.

Finally, the government announced that four temporary loan schemes will be extended to 30th November 2020 for new applications. Namely, they are:

The Business Interruption Loan Scheme
The Coronavirus Large Business Interruption Loan Scheme
The Bounce Back Loan Scheme
The Future Fund

Eviction ban

The government has decided to extend support to stop business evictions for the rest of 2020. The eviction ban applies to commercial tenants, including hair and beauty salons, barbershops, nail and eyelash bars and tanning shops.

Country-specific help schemes

There are also dedicated schemes available for particular countries of the United Kingdom. If you are a hair and beauty specialist from Northern Ireland, Scotland or Wales, you may be entitled to additional forms of financial assistance. Make sure to get familiar with:

It's no news that COVID-19 has been deeply impacting our industry, but with the government's support and hard work of all hair and beauty specialists that are affected, we are positive we will manage to pass through it all and come out stronger than ever. The Booksy team is proud to keep supporting salon owners and solo specialists to manage their businesses throughout these uncertain times. We do not only keep creating useful content but are also launching important features - like online gift cards and the COVID-19 disclaimer form - to help our customers make it through.

Grab your free Booksy account now and see for yourself how we can help you run your business effectively in the new normality.