Following the recent announcements regarding the situation in our industry, the government has specified which help schemes are to be extended, which are being halted or postponed, and what new forms of financial support are being introduced. Our quick guide consists of a short description of each scheme, as well as an explanation of its rules and eligibility, and includes helpful links to official government websites if you would be interested in getting more in-depth information. In our guide, you will find programs dedicated to both salon owners and solo specialists. Without any further ado, let’s get familiar with all the changes introduced at the beginning of 2021.
After the announcement of yet another lockdown that is supposedly going to last till at least mid-March, the Chancellor has declared one-off top-up grants for retail, hospitality and leisure businesses to help them make it through to the spring.
It will take the form of a one-off allowance, granted to closed businesses as follows:
The grant is expected to benefit over 600,000 business properties, worth £4 billion in total across all nations of the UK. The Scottish and Welsh Governments as well as the Northern Ireland Executive will all receive additional funding as a result of this and other announcements connected to financial help schemes.
The grant is announced to benefit any business which is legally required to close, and which cannot operate effectively remotely.
This grant will be available all across the United Kingdom (in England, Scotland, Wales and Northern Ireland). You can find more information about the New Lockdown Grant on the government website.
Job Retention is not a new help scheme, but an extended one. If you are not familiar with it, you can find more information in our first take on financial help for hair and beauty specialists in the UK - it will give you some much-needed insight. The Job Retention Scheme is being extended until the end of April 2021.
The rules of the scheme stay unchanged - employers are able to access support to continue paying part of a salary to employees that would otherwise have been laid off due to the COVID-19 outbreak. The support covers up to 80% (maximum of £2,500 per person) of their salary, with the remaining 20% being paid by the employer. Employers are also responsible for paying employer NICs and pension contributions, and should continue to pay their employees for hours worked the normal way.
Eligibility also remains unchanged, so all employers with a UK bank account and UK PAYE schemes can access this form of support. It also doesn’t matter if you have already taken advantage of this help scheme or not.
The employees must be on an employer’s PAYE payroll by 23:59 30th October 2020 to be eligible for the Coronavirus Job Retention Scheme. They can be on any type of contract. The number of hours that they are not working (and hence - the financial help for which they are eligible for) is supposed to be calculated by reference to their usual hours worked in a claim period.
The scheme is available all across the United Kingdom (in England, Scotland, Wales and Northern Ireland). You can find more information about the Job Retention Scheme extension on the government website.
Self-Employment Income Support is yet another extended scheme - currently, it is possible to receive a third grant under it. It is available for self-employed specialists or members of a partnership whose businesses have been adversely affected due to the coronavirus outbreak.
The third grant within this scheme is supposed to be worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits. The maximum sum you can receive is £7,500 in total.
Quoting the government guidance, “if you weren’t eligible for the two previous grants, based on the information in your Self Assessment tax returns, you won’t be eligible for this one.”
The rules are as follows:
Mind that this grant will be subject to Income Tax and self-employed National Insurance and must be reported on your 2020 to 2021 Self Assessment tax return.
The scheme is available all across the United Kingdom (in England, Scotland, Wales and Northern Ireland). You can find more information about the third grant of Self-Employment Income Support Scheme on the government website.
Yet another scheme you may be already familiar with. It takes the form of a loan, dedicated to small and medium-sized businesses. For the time being, the scheme is said to remain active until 31st March 2021.
There are 117 lenders participating in the scheme, including all the main retail banks. They provide a loan worth up to £5 million, with no interest due for a year (namely - 12 months), with the government guaranteeing 80% of the finance to the lender and paying interest and any fees for the first year. The maximum length of the facility is up to 3 years for overdrafts and invoice finance facilities and up to 6 years for loans and asset finance facilities.
Any UK-based business with a turnover of up to £45 million. You should also be able to prove that your business has been severely impacted by the coronavirus and that if it weren’t for its outbreak, it would be viable. If your business is considered to be a large one, you can apply for this scheme’s “big brother” - the Coronavirus Large Business Interruption Loan Scheme.
The scheme is available all across the United Kingdom (in England, Scotland, Wales and Northern Ireland). You can find more information about the Coronavirus Business Interruption Loan Scheme on the government website.
The Bounce Back Loan is another help scheme you could have previously taken advantage of. It takes the form of a loan, dedicated to small and medium-sized businesses. It is said to be open to applications until 31st March 2021.
There are 29 lenders participating in the Bounce Back Loan Scheme (including many of the main retail banks). They allow business owners to borrow between £2,000 and up to 25% of their turnover (the maximum sum available is £50,000), with the government guaranteeing 100% of the loan to the lender. There won’t be any fees or interest to pay for the first 12 months, after which the interest rate will be 2.5% a year. The life of the loan is 6 years, but it is possible to repay earlier without any additional fees. Moreover, before the first repayment is due, the lender will contact you to discuss a possible extension of the term of the loan, moving to interest-only repayments for a period of 6 months (you can use this option up to 3 times) or pausing your repayments for a period of 6 months if you have already made at least 6 repayments (this is an option you can use only once).
Any UK-based business established before 1st March 2020 that was severely impacted by the coronavirus outbreak. You cannot apply for this scheme if you are already taking advantage of the Coronavirus Business Interruption Loan Scheme.
Important: if you have already claimed a Bounce Back Loan, but have borrowed less than you were entitled to, you can top-up your existing loan to your maximum amount. You need to request the top-up by 31st March 2021.
The scheme is available all across the United Kingdom (in England, Scotland, Wales and Northern Ireland). You can find more information about the Bounce Back Loan Scheme on the government website.
Finally, let’s mention the help schemes that are not being extended, either temporarily or permanently, as well as ones that are being postponed for later.
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