[Updated] Guide to the financial support available for beauty salons during the coronavirus pandemic
[Updated: March 24]
Prime minister Boris Johnson has confirmed that salons are forced to close during the coronavirus. Additionally, spas have also been ordered to close. The Government has pledged to provide more support to UK businesses in light of the coronavirus and following the 2020 Budget. A cash injection of £350bn has been promised to support businesses, but what financial support is available for your beauty salon or spa?
What new financial help is available to small businesses?
On March 20, the chancellor announced he will be helping to pay people’s wages, which will be applied in a number of different ways:
- The Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month – that’s above the UK median earnings level.
- The scheme, which is open to any employer in the country, will cover the cost of wages backdated to March 1 and will be open before the end of April for at least three months.
- The Coronavirus Business Interruption Loan Scheme will now be interest-free for 12 months (previously announced as being interest-free for six months). The loans will be available from Monday, March 23.
- The next quarter of VAT payments will be deferred to the following quarter and no business will pay VAT from now until mid June. This means businesses will have until the end of the financial year to repay those bills, which will be a £30 billion injection to businesses equivalent to 1.5% GDP.
- The Universal Credit standard allowance will be increased by £1,000 for the next 12 months.
- The Working Tax Credit basic element will also be increased by £1,000 for the next 12 months.
- Self-employed people can now access Universal Credit in full at a rate equivalent to Statutory Sick Pay for employees.
- The next Self-Employed self-assessment payments will be deferred until January 2021.
- Renters will receive nearly £1 billion of support by increasing the generosity of housing benefit and Universal Credit so the Local Housing Allowance will cover at least 30% of market rents in your area.
Following on from the 2020 Budget the government announced on March 18 that it has extended the financial support available to hair salons and barbers:
- No business rates for salons of any size, not just those with a rateable value below £51,000.
- A Bill is going through Parliament on 18 March to ensure Statutory Sick Pay (SSP) is paid from day one rather than day four – backdated to take effect from 13 March 13 2020.
- Businesses with a rateable value of less than £51,000 can access an additional cash grant of up to £25,000.
- Businesses that don’t pay business rates (because they benefit from small business rates relief) will see the £3,000 cash grant announced in last week’s Budget extended to £10,000.
- Three-month mortgage holidays for those in financial difficulty due to coronavirus.
- Private renters will be protected with new legislation that will protect them from eviction.
- Business loans on “attractive terms”, including a business interruption loan scheme which will provide loans of up to £5m, interest-free for six months, starting as soon as next week.
“The Government has promised some welcome relief for businesses which will struggle to survive under the latest measures to control the spread of coronavirus,” said Ian Egerton, National Hair and Beauty Federation (NHBF) president.
“But speed is of the essence – this additional support needs to be made available right now when hair and beauty salons need the support most. If clients stop coming into salons, hair and beauty businesses can’t continue paying employees or paying their bills.”
Hilary Hall, NHBF chief executive added: “Wages are by far the biggest cost for salons. Our phones have been ringing off the hook with calls from worried salon owners asking for advice on laying off staff or making redundancies.
“If the current crisis continues for any length of time, we will need more Government support, including rent holidays, suspension of tax payments such as PAYE, VAT or corporation tax and delaying planned increases to the National Living Wage/National Minimum Wage.”
What changes should I make now?
"2020 is a different world now – you need to accept it and steer your boat accordingly. No matter what you planned for your business in 2020, it probably needs to change now," says beauty business expert, Liz McKeon.
"Take advantage of this slow period to reflect: spend some time thinking about your business shift. Think about those pending website changes or your next marketing campaign."
Steps to implement now
- Adopt a "not now" attitude: "Think about where to reduce your outlays and cut your costs," says McKeon. "But, that doesn't mean you stop spending on marketing and business development activities that help your business grow. If you can stop spending on unnecessary things – do it now."
- Secure your credit: "Go and secure your extra cash to sustain and act now before it goes crazy," she says. "You may need an extension of credit to be able to fund your business during this time."
What other help and resources are available for salon owners?
1. “Rescue the hair and beauty salons UK” petition
Among the biggest of these efforts is a widely circulated petition, “Rescue the hair and beauty salons UK”, which has already reached 47,000 signatures and counting, as of March 18.
A number of requests are made in the petition, including a rescue plan package of £2bn to allow banks to release funding immediately, having coronavirus fall under appropriate insurance coverage such as “business interruption” or “civil unrest”, and ensuring landlords cannot claim any breach of non-payment during this time.
Also proposed is a greater amount of time to pay outstanding HMRC debt and emergency funding to cover statutory sick pay.
2. Phorest advice: five things clients can do for your salon
Salon software specialist Phorest has shared a handful of different ways you can ask loyal customers to support you at this time:
1. Getting valued customers to make positive reviews online about the quality and hygiene of your salon.
2. Make sure clients who enjoyed their experience take photos of the finished results, upload them to Instagram and tag the salon’s page.
3. Ask followers of your social media accounts to keep engaging with their content, as well as sharing Phorest’s own hashtag, #supportyoursalon.
Read more of Phorest’s suggestions for what your business should be doing during the coronavirus outbreak.
3. Hair & Beauty Charity support
The Hair & Beauty Charity is raising funds to help those in the industry who are facing extreme financial difficulties. Donate to the charity here, and find out how they may be able to help your business during the coronavirus. As the Hair & Beauty Charity can no longer raise money from its events, it has also launched a relief fund that you can donate on JustGiving.
4. Treatwell launches petition
Treatment booking platform Treatwell has announced its petition to protect and support the hair and beauty industry in response to the COVID-19 pandemic. Its Facebook Group, Behind Closed Doors, is also available for salon owners to share advice and support.