Need to know: the financial support packages for England

by Deborah Murtha | Nov 5, 2020 | News, Self Employment, SELF/STYLED Business

Confused by the recent spate of updates and what they mean for your business and finances? Here are all of the support packages available to the hair industry, and how to access them…

In this unsettled time, with circumstances changing so quickly, it can be difficult to wrap your head around everything. With the help of the NHBF, here is a concise list of the coronavirus financial support packages available to you and your business in the UK.

While the NHBF has welcomed the latest support packages from the government, it is continuing to lobby for a reduction in VAT to 5 per cent to mirror hospitality, further business rates relief, an extension to eviction protections and bounce-back loan repayment plans structured like student loans.

“As we enter a second national lockdown in England our immediate concern is that local councils start distributing the grant funding they have been given by the government to support businesses affected by the lockdowns as soon as possible,” says NHBF chief executive Richard Lambert.

“Hair and beauty businesses are hugely anxious about how they will meet their financial commitments if they can’t work. Most are likely to have no safety buffer of surplus or savings to fall back on second time around. We are therefore continuing to push for further support to help businesses survive throughout this difficult period.”

The latest coronavirus financial support packages available to businesses are as follows:

Job Retention Scheme: Furlough

The furlough scheme has been extended. It had been due to finish at the end of October 2021 – it will now end on 31 March 2021, as confirmed by Chancellor Rishi Sunak on 5 November.

You can bring furloughed employees back to work on a part-time basis or furlough them full-time. Employers must pay National Insurance and employer pension contributions. Employees will receive 80 per cent of their salary for hours not worked, up to a maximum of £2,500.

Job Support Scheme

PLEASE NOTE: The Job Support Scheme, which was scheduled to come in on Sunday 1 November, has been postponed until the furlough scheme ends. The furlough scheme has been extended – see above.

If businesses are legally required to close, the government will cover the cost of two thirds of employees’ salaries where they can’t work for a week or more. Employers must cover National Insurance and pension contributions where applicable.

If businesses are still open but adversely affected by coronavirus, the government is making it easier to keep employees on:

Employees must work a minimum of 20 per cent of their hours. The employer will pay the wages for these hours.
For every hour not worked, the employee will be paid two-thirds of their usual salary. The employer will contribute five per cent to a cap of £125 a month, with the rest paid by the government to a cap of £1,541.75 a month.

Find out more on the government website.

Job Retention Bonus

The Job Retention Bonus is a £1,000 one-off taxable payment to the employer for each eligible employee that you furloughed and kept continuously employed until 31 January 2021.

You’ll be able to claim the bonus between 15 February 2021 and 31 March 2021. You do not have to pay this money to your employee. Find out more on the government website.

Self-employed Income Support Scheme

The Self-Employed Income Support Scheme has been extended to cover 80 per cent of profits for the period November – January up to £7,500.

The government is offering two grants, each available for three-month periods covering November 2020 to January 2021 and February 2021 to April 2021. Grants will be paid in two lump sum instalments, each covering a three-month period.

The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The government will provide a taxable grant, covering 55 per cent of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £5,160 in total.

The grants will be increased from the previously announced level of 40 per cent of trading profits to 80 per cent, returning to 40 per cent from 1 February 2021.

The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course. The grants are taxable income and also subject to National Insurance contributions. Find out more on the government website.

Business Grants

Salons or barbershops forced to close in England due to local or national restrictions will be eligible for the following:

For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks.
For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks.
For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Visit your local authority’s website to find out how to apply. Find your local authority on the government website. £1.1bn is also being distributed to local authorities so they can make one-off payments to help support businesses.

Loan schemes

The Business Interruption Loan Scheme provides loans of up to £5m, with no interest due for 12 months. The government guarantees 80 per cent of the finance to the lender and pays interest and any fees for the first 12 months. Open for applications until 31 January 2021.
The Bounce Back Loan helps small and medium-sized businesses to borrow between £2,000 and up to 25 per cent of their turnover. The maximum loan available is £50,000. The government guarantees 100 per cent of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5 per cent a year. Open for applications until 31 January 2021.

Claim back Statutory Sick Pay

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the Statutory Sick Pay paid to current or former employees who are off sick for coronavirus-related reasons. Find out more on the government website.

Subject to restrictions being lifted, businesses will be able to re-open on Thursday 3 December.

For more information on coronavirus financial support packages and FAQs, you can also visit www.nhbf.co.uk/coronavirus.