Updated 10.04.20: Coronavirus | 10 point business survival guide

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
1. Stop trading
Your salon, spa, studio, barbershop, must be closed.

2. Keep your Clients informed

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.

How much can you claim
The grant is based on the lower of

i) 80% of the monthly salary/wages and
ii) £2,500

plus the associated employers NIC and pension contributions.

How to work out what monthly salary/wages is can you claim
For employees on a regular salary, use 80% of the employee’s gross salary as at 28 February 2020.

For an employee who has been employed for more than 12 months, but whose pay varies, use the highest of the:

i) Same month’s from the same month last year
ii) Their average monthly earnings for the tax year 2019/20.

For an employee who has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.

If the employee only started in February 2020, pro rate their earnings to date and use that as a base.

Salary/wages includes any regular payments the employer is obliged to pay the employee.
This includes wages, past overtime, fees and compulsory commission payments.
However, discretionary bonuses (including tips) and commission payments and non-cash payments should be excluded.

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.

You must furlough an employee for a minimum of 3 weeks.

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.

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.



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.
 
Last edited:

BannerPenguin

Well-Known Member
Joined
Mar 3, 2013
Messages
2,930
Reaction score
1,053
Location
www.bannerpenguin.co.uk
Hey bud.

Is it right for those of us with small LTD companies who pay ourselves minimum wage PAYE and then dividends get sod all?
 

TheDuchess

Well-Known Member
Joined
Mar 9, 2014
Messages
644
Reaction score
688
Location
Bath
Great summary Salonfrog, thanks for posting. Just one minor correction to the furlough pay info. I’ve been advised that employers can claim all of their staff wages that they pay to furlough staff, up to 80% of their usual pay plus employers NI and statutory minimum pension contributions. The way you’ve phrased it, it reads that employers only claim back 80% of whatever they pay staff. It’s a huge relief to not have to throw staff on to the mercies of the benefit system straight away - although my cash flow is squeezed so tight, I’ve literally nothing in my bank account.

Banner penguin, yup. Them’s the breaks. I’m shafted too. As you are in business services I suggest you reach out to your client base and generously share all the help and support you can offer. You need to engage with clients that are still going to be standing when all of this is over. The reality is that businesses that run up debts during this period are unlikely to survive. This is the time to offer leadership support and be ready to reinvent ourselves with new projects launching in the post COVID 19 era.
 

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
Hey bud.

Is it right for those of us with small LTD companies who pay ourselves minimum wage PAYE and then dividends get sod all?
At the moment, unfortunately yes.
The CBI and others are raising our cause though.
 

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
employers can claim all of their staff wages that they pay to furlough staff, up to 80% of their usual pay plus employers NI and statutory minimum pension contribution
Thanks for the feedback. I’ll make that more clear.
Trying to simplify it vs enough detail was quite hard.
 

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
I've now updated the original post to make the 80% claim more specific.
Thanks @TheDuchess
 

wowbb

Well-Known Member
Joined
Nov 29, 2007
Messages
2,028
Reaction score
238
Location
UK
At the moment, unfortunately yes.
The CBI and others are raising our cause though.
I thought directors can also furlough themselves?
 

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
I thought directors can also furlough themselves?
They can. However they can’t do anything on their business if they do. So they couldn’t run their payroll for example or any undertake any admin on it. Effectively your business is dormant.

And if you did, you’d also need to look at what salary you could claim on. If you’ve been taking a small salary and bigger dividend as is usual, you’d need to look at that.

The minimum you must furlough for is 3 weeks. So one option is to furlough yourself for 3 weeks, then come back for a day or 2 to do company admin, then re furlough yourself for 3 weeks; and so on...
 

IndigoBlue

Active Member
Joined
Jan 31, 2017
Messages
25
Reaction score
26
Location
Berkshire
Hello,
I am a mobile hairdresser,married with no children and work full time. Thank you for posting this information but may I clarify my position?

My husband is self employed working in sales for a car leasing firm,the majority of the firm are employed and have been given furlough,he is,along with a few others,kept on the help to keep the business afloat so there is a company for them to come back to. I'm explaining this to show that there will be an income to the household although greatly reduced as his salary is made up from the commission of delivered cars...as garages are closed the only car deliveries made are to key workers.

I would like to know whether I just wait to be contacted by HMRC as suggested in your post or whether I should apply for Universal Credit to keep me going. I have plodded along for thirty years,I LOVE my job,always looking to improve and even make YouTube videos about hair.I h always paid my taxes,I'll never own a yacht but I have always been fiercely independent but now feel totally lost.

Sorry for the life story,I'd really appreciate some guidance. Many thanks :)
 

TheDuchess

Well-Known Member
Joined
Mar 9, 2014
Messages
644
Reaction score
688
Location
Bath
I don’t think there are any experts on benefits claims here. My understanding is that you’d be unlikely to qualify for UC as your combined income will be probably be over the threshold - but you should look into claiming as I don’t think you can backdate a claim.

Try and do your best to keep yourself visible. You can look into volunteering opportunities locally and reach out to your clients to see if any need help. Building goodwill in your community is never wasted.

You may well be one of the lucky people who qualify for the self employed scheme.
 

IndigoBlue

Active Member
Joined
Jan 31, 2017
Messages
25
Reaction score
26
Location
Berkshire
I don’t think there are any experts on benefits claims here. My understanding is that you’d be unlikely to qualify for UC as your combined income will be probably be over the threshold - but you should look into claiming as I don’t think you can backdate a claim.

Try and do your best to keep yourself visible. You can look into volunteering opportunities locally and reach out to your clients to see if any need help. Building goodwill in your community is never wasted.

You may well be one of the lucky people who qualify for the self employed scheme.
Hello The Duchess,

I appreciate your reply, thank you. The reason for my post was because the OP is a salon accountant and hoped would be able to clarify my thoughts.
I am happy knowing I will have a full book when I am able to return,I have since been very fortunate in receiving retainers without asking to tide me over from a few of my clients!
I feel very lucky there.
I also pulled my finger out yesterday and managed to get many of my costs down either with phoning or simply on web chat-my gas/elec was easy,my car lease have given me a three month holiday payment plan and my credit card down to minimum payments...closed down DDs I don't really need like Experian and a music site,I feel much more confident today and urge anyone in my situation to do the same-every company was very helpful.
I just don't want to take out any loans as it is going to be hard enough to catch up as it is,fingers crossed everyone stays safe and we can get back to some sort of normality before too long.

Thanks again.
 

Marzie

Well-Known Member
Joined
Jul 20, 2013
Messages
55
Reaction score
26
Location
Scotland
Hi I have tried to bring costs down too. Have you tried the music licence ? I also suspended my bin uplift and had a refund from babtac for the time being until I am operating again. Every little helps.
 

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
@IndigoBlue
Hi, sorry for the delay in replying.
HMRC has said not to claim or contact them about self employment grants as they will be calculating which self employed people will get a grant.

And yes, I would apply for UC or anything you can.
 

IndigoBlue

Active Member
Joined
Jan 31, 2017
Messages
25
Reaction score
26
Location
Berkshire
Hi I have tried to bring costs down too. Have you tried the music licence ? I also suspended my bin uplift and had a refund from babtac for the time being until I am operating again. Every little helps.
Hi,I am mobile so I don't have a music license but good thinking,the more bills organised or delayed the better! Exactly my thoughts,every liyyle helps! I have frozen my Slimming World account too so I have to really take control.almost a target too! Take care.
 

IndigoBlue

Active Member
Joined
Jan 31, 2017
Messages
25
Reaction score
26
Location
Berkshire
@IndigoBlue
Hi, sorry for the delay in replying.
HMRC has said not to claim or contact them about self employment grants as they will be calculating which self employed people will get a grant.

And yes, I would apply for UC or anything you can.
Thank you for your reply,the online information wasn't really clear and i didn't want to sit idle when there could have been a chance to claim some benefit to help get us through. I really appreciate it.
 

Sunflower19

Member
Joined
Oct 19, 2019
Messages
24
Reaction score
13
Location
Eh52 5ta
I have a wee question, with the current conditions and salons being closed Im self employed and rent a chair, just wondered, I'm still currently paying the chair rent, is this right? In thinking yes but not sure and not sure how else to find out any advice would be great.
 

Marzie

Well-Known Member
Joined
Jul 20, 2013
Messages
55
Reaction score
26
Location
Scotland
I have a wee question, with the current conditions and salons being closed Im self employed and rent a chair, just wondered, I'm still currently paying the chair rent, is this right? In thinking yes but not sure and not sure how else to find out any advice would be great.
Hi there is another thread where this is mentioned and you shouldn’t be paying your chair rent is their opinion
 

salonfrog

Accountant for salon owners
Joined
Jun 20, 2017
Messages
352
Reaction score
226
Location
www.salonfrog.com
Hi everyone
hope you're all coping and keeping well.

I've updated my post with the latest.
 

TheOracle

Well-Known Member
Joined
Jan 22, 2020
Messages
74
Reaction score
38
Location
London
I have a wee question, with the current conditions and salons being closed Im self employed and rent a chair, just wondered, I'm still currently paying the chair rent, is this right? In thinking yes but not sure and not sure how else to find out any advice would be great.
Depends on your contract. If there isn't anything that mentions salon closure, then yes they can still charge. Whether they do, or maybe reduce it, that's another question.
 

TheOracle

Well-Known Member
Joined
Jan 22, 2020
Messages
74
Reaction score
38
Location
London
Thanks salonfrog, this is good stuff.
I know furlough payments have happened for some already, and HMRC self employed scheme goes live next week- whoop!!!
 

Latest posts

Top