Essential guide: use the coronavirus budget to help your salon
Published
19th Mar 2020
by laurahusband
The coronavirus budget has announced a number of measures that will support hair salons and salon consultant Ryan Fox has compiled an essential guide to how the coronavirus budget will help you and your salon over the next few months.
Salon consultant Ryan Rox said: “The UK economy is now predicted to grow at 1.1%, revised down from 1.4% a year ago but this figure, which does not take into account the coronavirus effect, would be the slowest growth rate since 2009 with growth predicted to be 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24. Inflation is forecast at 1.4% this year, increasing to 1.8% in 2021- 2022. He added: “The impact of coronavirus means we could be looking at deflation and a recession this year depending on how bad the knock-on effect is to the economy.”
Ryan Fox has outlined exclusively for HJ, which parts of the coronavirus budget will potentially be good and bad for UK salons:
What's good for salons in the coronavirus budget:
- Huge additional money and resources announced for the NHS will benefit the health and wellbeing of salon owners, salon teams and clients.
- Temporary changes to Statutory Sick Pay being paid from day 1 will be good for salon owners, stylists and society. The money will be immediately rebated to the salon for 2 weeks.
- Interest rate cuts due to coronavirus should make loans easier to get and banks are being encouraged to offer small firms ‘business interruption’ loans at favourable interest rates. This may help salons to keep things going during a difficult period ahead.
- Business rates for firms with a rateable value of £51,000 or less are being scrapped for this year. This is good news for salons as most will welcome financial relief to help with a difficult period. Those eligible for small business rates relief will get a £3,000 cash grant.
- The National Insurance Contributions tax threshold rises from £8,632 to £9,500. This will save 500,000 employees just over £100 a year. This means salon owners and stylists will get to keep more of their money before they pay National Insurance.
- The NIC Employment Allowance will also be increased from £3,000 to £4,000 from April 2020.
What's bad for salons in the coronavirus budget:
- Sudden loss of trade, supply chain problems and a reduction in the workforce will all hit salons and other small businesses alike.
- The measures announced by the government may not be enough support for many salons who are already struggling, have existing debts and no reserves to see them through.
- Corporation Tax rates that were due to fall to 17% will remain at 19% in 2020. Salons who are set up as companies won’t get a reduction in corporation tax. This money has instead been earmarked for the NHS.
- The National Minimum Wage and National Living Wage will rise again from April 2020 to the following rates: Apprentice £4.15, Under 18s £4.55, 18 to 20s £6.45, 21 to 24s £8.20 and 25s and over £8.72, which is the largest rise we have seen so far. This is an additional cost that salons will need to find and will increase wage and pension costs.