Beauty salons and spas – Coronavirus Job Retention Scheme extended until October
Update: the UK Government has announced today (May 12) that it will be extending its Coronavirus Job Retention Scheme until the end of October.
The scheme, which was originally meant to end at the end of June, has been extended for another four months. Until the end of July, there will be no changes to the scheme – which sees the Government grant cover 80% of the salary of retained workers, up to the sum of £2,500 per month.
However, from August to October, the Government will ask employers to start sharing the costs of paying people’s salaries, with more information on this to come at the end of May. Around 7.5 million people in total are now covered by the scheme.
Chancellor Rishi Sunak said on Twitter: “The job retention scheme will be extended, for four months, until the end of October. By that point, we will have provided eight months of support to British people and businesses. Until the end of July there will be no changes to the scheme whatsoever.
“From August to October the scheme will continue, for all sectors and regions of the UK, but with greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part-time. We will ask employers to start sharing, with the Government, the costs of paying people’s salaries.”
He added: “Further detail will follow by the end of May but I want to assure people one thing won’t change – workers will, through combined efforts of Government and employers, continue to receive the same level of support as they do now, at 80% of their salary, up to £2,500.”
This news follows the Government’s announcement of its three-phase Covid-19 Recovery Strategy, which won’t see many businesses reopen until June/July – beauty salons could open on July 4.
What financial help does the Coronavirus Job Retention Scheme give salon and spa owners until the end of July?
- The Government grant 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. It has been extended until the end of October and until the end of July there will be no changes, However, from August to October, the Government will ask employers to start sharing the costs of people's salaries. More information on this to come soon
- The minimum amount of time that an employee can be furloughed is three weeks.
What other financial support is the Government giving small businesses:
- 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 are 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
- 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
What support did the Budget 2020 outline for salon and spa owners?
Following on from the 2020 Budget the Government announced on March 18 that it has extended the financial support available to beauty salons and spas:
- No business rates for salons of any size, not just those with a rateable value below £51,000
- 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.
What other help and resources are available for beaut salon and spa 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.