What Financial Support Is Available For Salon Owners? Government Grants, Loans, Breaks And More…

March 28, 2020 Ryan
What Financial Support Is Available For Salon Owners? Government Grants, Loans, Breaks And More… thumbnail

During this unprecedented and uncertain time for salon owners our Facebook group has had more questions than normal…

Am I eligible for government funding?

Do I have to pay my staff?

Will I get a grant?

What does furlough mean?

Can I still work if I furlough myself?

Do I still have to pay rent to my landlord?

Now these are by no means an exhaustive list, and this isn’t an exhaustive article either, but I hope it will address some of the most commonly asked questions and point you in the right direction for further information.

But first, a disclaimer…

I am not an accountant or legal specialist or government employee and have attempted to collate as much information as I can so that it’s in one place.

It has been written for salons in England.   (See below for links for other UK countries).

You are advised to do your own thorough research and not to rely on anything you read in this article (or anywhere on the internet for that matter).

If in doubt, speak with your own accountant, advisor or government office.

So, let’s continue with some specific questions which I keep seeing over and over again…

Am I eligible for the government grant?

Government grants are provided via your local authority and your eligibility is determined by whether or not you’re registered to pay business rates.  These range from £10,000 to £25,000 depending on the rateable value of your premises.  Speak with your own local authority to determine whether you qualify.   There is also more information here.

I have rate relief on my property, will I get anything?

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

If I work from home can I get the government grant?

No, it’s for those who pay business rates on a commercial premises.  You’ll have to look at some of the other options listed below.

If I work mobile can I get the government grant?

No, it’s for those who pay business rates on a commercial premises.  You’ll also have to look at some of the other options listed below.

Do I have to repay the government grant?

Nope, it’s not a loan and you do not have to repay it.

Are the grants means tested?

No they are not.

What help is there for my staff?  I can’t afford to pay them.

If your staff are employed on a PAYE basis then there is support through the Coronavirus Job Retention Scheme.

This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise known as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1 March and is initially open for 3 months, but will be extended if necessary.   Click here for more information on this.

What other support is available for business owners?

If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to either defer the payment until a later date or you can pay the VAT due as normal.   There is more information on this here.

For Income Tax Self-Assessment, payments due on the 31 July 2020 may be deferred until 31 January 2021.

I am self employed so what help is there for me?

The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.  There is more information available on this here.

Can I claim more than one grant?

Each level of assistance is judged on its own merits and you can apply for everything that you qualify for.

Is there support for directors of their own limited company?

It is now becoming clearer that directors who pay themselves dividends will not receive support in the same manor to the self-employed.   At the time of writing Universal Credit may be the only option available aside from Coronavirus Job Retention Scheme (which in itself is still a grey area and you should seek independent advice on this matter).

How do I apply for Universal Credit?

Universal Credit is to assist with your living costs.  It’s means tested and you’ll need to apply to see if you qualify.   You can do so here.

Do I still have to pay my rent?

It’s recommended that you speak with your landlord to discuss your current situation.  You might also want to do this with your finance suppliers, leasing companies and even utility providers if you’re struggling to meet your commitments.

Can I claim for business interruption on my insurance policy?

You may be able to, however many insurers do not cover Coronavirus.  You’ll need to check your policy and speak with your insurer directly.

Are there loans available for businesses?

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

You can read all about the scheme here.

I can’t afford to pay my rent.  Will I be evicted?

Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.  These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.  There is the option for the government to extend this period if needed.

This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.

Is this for all UK salons?

Because some elements of business support are devolved, the measures you can access may differ if your business is in Scotland, Wales or Northern Ireland.

Businesses in Scotland click here.   Businesses in Wales click here.  Businesses in Northern Ireland click here.

If in doubt, speak with your own accountant, advisor or government office.

As mentioned, this article isn’t exhaustive and we understand you might have even more questions.  This article was updated on 28th March 2020 and is true and accurate to the best of our knowledge.   If we’ve made a glaring error, or some information is superseded then please feel free to contact us at hello@salonology.uk.

Click here for the UK Government website.

Click here to join our free Facebook group for daily challenges, positivity and support during the pandemic.

This may also help, courtesy of Whyfield Accountants

 

You might also enjoy these related articles….

Keeping Your Head Happy During The Pandemic

Coronavirus Cancellations?  Don’t Panic, Do This Instead

Salon Owner Lockdown Guide