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Interview with Timely about our coronavirus 10 point business survival guide

Coronavirus | our 10 point business survival guide

Continually updated as new guidance becomes available from the Government, so keep checking in!

 

1. Stop trading

Your salon, spa, studio, barbershop, must be closed.

You should not be providing services to anybody (not even if this is at your home).

2. Keep your Clients informed

You should inform your Clients that you are closed.

Keep in contact with them with regular updates and blogs.

3. Furlough your staff to get 80% of their wages back

For all staff who are not on SSP, not on SMP/SPP, or cannot work from home, you should furlough them.

Furlough means to grant a leave of absence and is pronounced "fur-low."

You must get their written permission to furlough them.

Coronavirus job retention scheme CJRS

Later in April, you can then apply for a JRS grant from HMRC of up to £2,500 per employee, per month.

This covers 80% of furloughed employees wages + 100% of Employers' NIC + 100% of employers 3% auto enrolment pension contribution.

Furlough key criteria

They must have been on your payroll on 28 February 2020.

They must have been furloughed after 28 February 2020.

Other practicalities

You can pay them 80% of their usual wage but you must get their written permission to do this.

Furloughed staff cannot do any work for you, even from home.

Continue paying your staff through PAYE as usual.

You will still need to pay any PAYE and NIC's due to HMRC.

Your furloughed employees can get another job if they want.

For those that resigned and left after 28 February to start a new job, so are not eligible under the scheme, they can ask their old employer to rehire them, then furlough.*

*This new guidance appears to use very generic wording nor any guidance on how it would work; and remember, there is no obligation to re-hire, and we advise employers to be cautious.

Acas has confirmed that employees on furlough can take holiday at the same time.

4a. Get 2 types of business rates relief | Salons in England

There are 2 reliefs available to you.

Relief 1 is an automatic 12 month business rates holiday:

All retail businesses pay no business rates for the 2020 to 2021 tax year.

'Retail' includes 'hair and beauty'.

You receive this automatically.

Relief 2 you need to apply for one of the following:

Either:

i) Small Business Grant Scheme of £10,000

If you receive small business rates relief (SBBR), or rural rate relief (RRR).

Apply for a one-off grant of £10,000.

or:

ii) Retail, Hospitality and Leisure Grant Fund of £25,000

If your property has a rateable value of up to £15,000 apply for a grant of £10,000.

If your property has a rateable value of over £15,000 and less than £51,000 apply for a grant of £25,000.

Property with a rateable value of £51,000 or over is not eligible for this scheme.

How to access the schemes

You should contact your own relevant local authority.

4b. Get 2 types of business rates relief | Salons in Scotland

There are 2 reliefs available to you.

Relief 1 is an automatic 12 month business rates holiday:

All retail businesses pay no business rates for the 2020 to 2021 tax year.

'Retail' includes 'hair and beauty'.

You receive this automatically.

Relief 2 you need to apply for:

Either:

If you receive small business rates relief (SBBR), or rural rate relief (RRR).

Apply for a one-off grant of £10,000.

or:

If your property has a rateable value of over £18,000 and less than £51,000 apply for a grant of £25,000.

Property with a rateable value of £51,000 or over is not eligible for this scheme.

How to access the schemes

You can find the application form on your local Scottish authority website.

 

5. Apply for a Coronavirus Business Interruption Loan

These loans are available to any business that has been affected by the coronavirus.

Interest free for the first 12 months.

Low interest after this.

6 years to pay them back.

How to apply

Work out how much you want to borrow
eg 3 months lost income from being closed

Contact your own business bank:

Banks must match the current low ‘commercial’ rate of interest.

A CBIL loan is no longer a last resort so your business doesn't have to prove they have no other avenue to go down.

Banks are now banned from demanding personal guarantees for loans under £250,000.

Contact them now!
You may be put on a waiting list to get a call back from them, which could be a couple of weeks away.
In the meantime, you may be given a form to complete so you can be working on this.

6. Check your insurance

Contact your insurance company to see if you are covered for business interruption and loss of earnings.

7. Take a mortgage holiday

Contact your own personal mortgage provider if you require a payment holiday.

Don't put it off. The sooner you contact them, the better.

8. Hold off paying tax due

i) VAT

VAT due to HMRC between 20 March 2020 and 30 June 2020 can be deferred.
Instead, you have until 31 March 2021 to pay the amount.

e.g. For the VAT quarter ending 31 March 2020, your payment would have been due by 7 May 2020.
You can now delay this payment until 31 march 2021.

If you normally pay by direct debit, you need to cancel this with your bank.

You do not need to inform HMRC.

You do need to submit VAT returns as normal.

ii) Personal tax

Your next income tax instalment would usually be 31 July 2020.
You do not have to pay this until 31 January 2021.

iii) All taxes

If you cannot pay any amounts due to HMRC, contact them and let them know.
Do not bury your head in the sand!

9a. Chair renters and contractors

If you are self employed (e.g. renting a chair in a salon) there is support for you.

If you are a salon that rents chairs to others, look after them - you want your self employed businesses to be with you when you re-open!

Coronavirus Self-Employment Income Support scheme

Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month; for the next 3 months.

To get this:

You must have submitted a tax return for 2018-19 (if you haven't, HMRC has given you until 23 April 2020 to do so).

At least half of your annual income from this return needs to have come from being self-employment.

Your profit must have been less than £50,000 (or has been when averaged between 2016-17, 2017-18 and 2018-19 tax years).

You must have started trading on or before 5 April 2019.

You are self employed and would still be trading if it hadn’t been for the interruption to business due to the coronavirus (or you are still trading).

You can continue to work.

Property letting businesses are not regarded as a trade, so landlords will not qualify.

Grants will be paid in a single lump sum covering all 3 months, and will start to be paid at the beginning of June.

Individuals should not contact HMRC; they will contact those taxpayers who are eligible and will invite them to apply for the payment online.

9b. Owner/Directors of salons

Where you run your salon through a Ltd company (i.e. you are the Shareholder/Director):

You are not self-employed, so not eligible for the self-employment income support scheme.

You could furlough yourself and apply for the Coronavirus job retention scheme, but there are issues around this:

i) You cannot do any work for your company. No admin, no sales, no payroll. Nothing. Your business would become dormant.

ii) As most Owner/Directors take a small salary and larger dividends, the 80% only applies to the smaller salary.

You must furlough someone for a minimum of 3 weeks, so you could furlough yourself for 3 weeks (undertaking no work for your salon),
then go back to work for a couple of days, then re-furlough yourself for a further 3 weeks, and so on...

iii) To be eligible, the Director would have to have been on the payroll at 28th February and previously paid through the company's PAYE system. If a Director takes fees (rather than salary) not through the PAYE system, they would not be eligible.

 

10. Look after yourself

These are unusual and stressful times.

Don't panic.

Eat well.

Get some sleep.

Look after your loved ones.

When this is all over, your clients will soon forget how they couldn’t get their last hair cut when they wanted it from you.
Your staff will forget that you closed the salon when they most feared they wouldn’t be able to pay their own mortgages.

But they will remember how you treated them. How you handled the situation. That you were open and honest with them. That you did the right thing by them.

And when this is all over, and it will be, they’ll be there for you in return: Staff and Clients.

 

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