[Updated] Financial Help for UK Hairdressing Industry During Second COVID-19 Lockdown

by laurahusband / last updated November 5, 2020

COVID-19 UK Lockdown Hairdressing Industry

UK Prime Minister Boris Johnson has announced a month-long lockdown for England that will come into effect from Thursday 5 November 2020, so how will the latest COVID-19 UK lockdown measures affect the hairdressing industry?

This means non-essential shops and hospitality, including hairdressing, barbering and beauty salons as well as those working from a mobile studio or from a rented chair will have to close from this Thursday in England.

Mixing of households will not be allowed except for childcare purposes, which means freelance hairdressers will also have to stop working from Thursday 5 November in England.

This nationally-enforced lockdown follows on from England’s local COVID-19 local lockdown system that was announced on Monday 12 October. The main difference is the new national lockdown means the hairdressing, barbering and beauty industry in England has to close in its entirety until 2 December.

How will the latest COVID-19 UK lockdown measures affect the hairdressing industry?

During Boris Johnson’s press conference he pointed out that despite the fact the devolved UK nations are operating under different rules, most of the UK is currently operating some kind of lockdown. In fact, right now the hairdressing industry is currently closed in Wales, Northern Ireland and will be closed in England from Thursday 2 November and some parts of Scotland under the highest level of its five-level system.

What financial help will be available during the second COVID-19 UK lockdown for the hairdressing industry?

According to the UK Government’s website a number of existing schemes are being extended to help businesses during the latest COVID-19 lockdown. 

1. Furlough Scheme extension

On Thursday 5 November, the UK chancellor confirmed the UK Government’s Job Retention or furlough Scheme will be extended until the end of March 2021. This will cover 80% of wages with businesses only having to pay National Insurance and pension contributions.

The original furlough scheme was due to end on 31 October so it is hoped this extension will give salon owners some extra financial support for staff while salons are closed. The original furlough scheme which is being extended covered 80% of employees’ wages for hours not worked, up to a maximum of £2,500. Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ends on 31 October. This means the extended furlough scheme is more generous for employers than it was in October, according to the UK Government’s official website.

2. Job Support Scheme will only come into force when the extended furlough scheme ends, which is now not until March 2021

Please note: The Job Support Scheme was scheduled to come in on Sunday 1 November but it has now been postponed until the Furlough Scheme ends.

When it does come into force, it will help businesses who are legally required to close by covering 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 UK Government is making it easier to keep employees on:

  • Employees must work a minimum of 20% 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 5% to a cap of £125 a month, with the rest paid by the government to a cap of £1,541.75 a month.

3. Self-Employed Income Support Scheme for England, Scotland, Wales and Northern Ireland

The government is offering two Self-Employed Income Support Scheme grants, each available for three-month periods covering November 2020 to January 2021 and February 2021 to April 2021. The 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% 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 grant for November will be increased from the previously announced level of 40% of trading profits to 80%, returning to 40% for December 2020 and January 2021. This therefore increases the total level of the grant from 40% to 55% of trading profits for 1 November 2020 to 31 January 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.

4. Business premises grants

Business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. Also, £1.1bn is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

5. Mortgage holidays

Mortgage holidays are being extended so borrowers who have been impacted by COVID-19 and have not yet had a mortgage payment holiday will be entitled to a six-month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

6. Business grants

Businesses required 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 for business grants.

7. Extended job retention scheme

The extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when the UK Government will need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.

The job retention scheme is being extended until December. The level of the grant will mirror levels available under the scheme in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.

As under the current scheme, flexible furloughing will be allowed in addition to full-time furloughing. The Job Support Scheme will be introduced following the end of the current job retention scheme.

8. 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.

9. Business Interruption Loan Scheme

The Business Interruption Loan Scheme provides loans of up to £5m, with no interest due for 12 months. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. Open for applications until 31 January 2021.

10. Bounce Back Loan

The Bounce Back Loan helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% 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% a year. Open for applications until 31 January 2021.

What are the latest COVID-19 UK lockdown measures for the hairdressing industry across the UK?

The latest COVID-19 lockdown measures in Scotland

Scotland’s new five-level lockdown system comes into force on 2 November.

The five tiers – level Zero to Four – will be applied in different areas of Scotland dependant on their COVID-19 rates.

Level 0 – Near Normal – Indoor meetings allowed, maximum eight people from three households. 15 people from five households can meet outdoors.

Level 1 – Medium – Six people from two households can meet indoors and outdoors.

Level 2 – High – No indoor meetings with other households. Six people from two households can meet outdoors and in hospitality settings. This level will also involve closing pubs indoors or severely restricting opening times.

Level 3 – Very High – Closing pubs indoors and outdoors. Restaurants may be able to remain open under strict conditions.

Level 4 – Lockdown – Closer to a full lockdown of the type the UK went into in March 2020, with non-essential shops being forced to close. Some outdoors meeting still allowed. Schools will stay open.

The system will be reviewed on a weekly basis.

Businesses hit by closures or restricted trading will be able to access a new system of grants, with payments similar to those offered in England.

The latest COVID-19 lockdown measures in Wales?

Wales is currently in a two week “fire break” COVID-19 lockdown, which started on Friday 23 October and will end on 9 November. Under the new rules, all hair salons, barbershops, beauty salons and freelancers have closed their businesses along with all non-essential retail shops, gyms, leisure centres, bars, restaurants and hospitality.

The Welsh Government is providing a £300 million economic resilience fund to help businesses through the shutdown. As part of this, any business covered by the small business rate relief will receive a £1,000 payment.

Small and medium-sized retail, leisure and hospitality businesses that will be forced to close during the lockdown will be given a one-off payment of up to £5,000.

Wales First Minister Mark Drakeford said: “The fire break is the shortest we can make it, but that means it will have to be sharp and deep to have the maximum impact on the virus,” said

The latest COVID-19 lockdowns in Northern Ireland?

Hair, barbering and beauty salons were closed for four weeks in Northern Ireland from Friday 16 October.

Ahead of Northern Ireland’s four-week lockdown, Northern Ireland’s first minister Arlene Foster said: “We are facing the tough reality of rapidly rising rates of infection. There are increasing numbers of people requiring acute care in our hospitals and sadly we learned yesterday of the death of seven people from COVID-19.

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