What to do about Finances as a Freelance Hairdresser During Coronavirus
With daily news conferences and streams of news regarding the coronavirus outbreak we are constantly receiving updates on what we can and can’t do and what help is out there for those who will be financially affected by the virus. However, there is a sector of the employment market that has been left in the dark until now – the self-employed.
Self-employed, freelance and rent a chair stylists and barbers cannot see clients during the coronavirus pandemic either so what will happen to their incomes?
Chancellor Rishi Sunak announced some new measures today (26 March) that will support 95% of self-employed and freelance hairdressers and barbers in the UK by covering 80% of their annual monthly salary based on their average monthly profits over the past three years.
Help towards your finances as a freelance hairdresser during coronavirus – Self-Employed Income Support Scheme
The chancellor’s new scheme specifically for the self-employed, which includes self-employed hairstylists and barbers is called the Self-Employed Income Support Scheme. As part of this scheme the government will pay self-employed individuals who have been adversely affected by the coronavirus with a taxable grant worth 80% of their average monthly profits over the past three years, which is up to £2,500 per month.
This scheme will be available fo at least three months across the UK and the chancellor will extend this if necessary. He said you will be able to claim these grants and continue to do business, however please note: Hair stylists and barbers are not currently allowed to work in the UK for at least the next three weeks as part of the UK’s current lockdown.
Chancellor Rishi Sunak said: “This is unlike almost any other country, making the scheme one of the most generous in the world.” He added: “I’ve taken steps to make the scheme deliverable and fair. It’s only open to those with trading profits up to £50,00, who make a majority of their income from self-employment, have a tax return for 2019 and can apply.”
The HMRC expects people to be able to access the money within the new scheme no later than the beginning of June. If you are a self-employed/freelance hairdresser or barber the HMRC will contact you with an online form and the grant will be paid straight into your bank account.
To make sure the no-one missed out on support, the government has decided to allow anyone who missed the filing deadline in January to submit their tax return for the next four weeks.
The chancellor said he knows the self-employed and freelancers are struggling so he has made sure:
- You can access business interruption loans
- You can defer your income tax payments due in July until the end of January 2021
- You can access Universal Credit in full.
Hilary Hall, NHBF chief executive said, “We’re delighted that the Chancellor has announced this support for the self-employed, although we would like to have seen payments being processed earlier than June. We know that many self-employed stylists, barbers and beauty therapists have been extremely worried about money and their finances will already be stretched.”
She added: “The Chancellor warned that the self-employed will be expected to ‘pay in equally’ in the future because they don’t pay as much into the system as employees do, yet were being provided with government support which is similar to what employees get. He may be signalling changes such as self-employed people making pension contributions, National Insurance Contributions changes or bringing in IR35 sooner. This may prompt self-employed stylists, barbers and beauty therapists to reconsider whether they want to continue as self-employed, or switch to employment.”
Freelance Hairdresser Association’s Advice for Freelance Hairdressers
Sheila Abrahams from the Freelancer Hairdresser Association knows it is an extremely difficult and worrying time for freelance hairdressers. Once freelancers have got their finances in order, she is advising her members to turn to online education. “Luckily there is a lot of free education online at the moment for stylists to watch and our members are sharing/recommending the various sites they are visiting. At the FHA we are currently looking at launching webinars and we have a lot of fantastic trainers in our community. to bring exclusive training opportunities for members,” she said.
“It also has to be said that you should be making sure your colour techniques are up to date as we reckon you’ll have a lot of colour corrections to do when this is over,” advised Sheila.
But ultimately the main point is for freelancers to know that they aren’t alone. She said: “The most important thing is that people do not feel alone. We have a board virtual staff room where members are posting positivity every day to lift each other’s spirits.”