How does the budget affect the hair and beauty industry?
Last week Chancellor Rishi Sunak announced his 2021 budget; here journalist Charisse Kenion outlines what it means for hair and beauty businesses.
With Rishi Sunak announcing an additional £56 billion worth of measures, the beauty industry can expect to see more business grants – including a new Restart Grant in April – aimed at helping businesses ‘get going again’. As non-essential retail businesses will open up first, they will be able to receive up to £6,000 per premises.
For the hospitality, leisure and personal care businesses, there will be grants of up to £18,000 as they will be reopening later in the year and could be impacted by new government restrictions once they do open.
Some good news comes with the knowledge that the Furlough scheme, which pays up to 80% of people’s wages, has been extended until September and that there will be two more grants available in April and May as part of the Self-Employed Income Support Scheme.
And there’s also help for the newly self-employed, which will come as welcome relief for the thousands of people who took the plunge into being their own boss before the pandemic hit. Because the 19/20 tax return deadline had passed this meant many newly self-employed people were unable to apply for the government’s Self-Employed Income Support Scheme but with the new budget, they too will be able to apply for the final two grants mentioned above.
Business rate holidays have been extended until June, and from there on they will still be discounted by two thirds – up to a value of £2 million for closed businesses, with a lower cap for those who have been able to stay open during this time. Something else for businesses to think about is that the government is doubling incentive payments to £3,000 for those who hire new apprentices of all ages.
Despite the government support, we know that it’s not going to be easy for everyone. Even Sunak admits that, “even with the new Restart Grants, some businesses will also need loans to see them through. As the Bounce Back Loans and Business Interruption Loans schemes come to an end, we’re introducing a new Recovery Loans Scheme to take their place,” says Sunak.
One part of the budget that the beauty industry is not happy about is that the personal care sector has not been included in the new 5% reduced VAT rate. Industry leaders from Millie Kendall MBE, chief executive of the British Beauty Council to Samantha Grocutt, president of the Hair & Beauty Charity, have both expressed disappointment at the sector’s lobbying not being accepted.
While there are clearly some misgivings about the government’s decision to not extend the 5% reduced VAT to the personal care industry, many are campaigning on a daily basis to change the system, and with the economy expected to return to pre-Covid-19 levels by the middle of 2022, it’s clear that things can only get better.
Sunak commented on his first budget, last year and how important it had been for him at that time to do whatever it took to support the economy and the businesses and families that needed help. As he delivered the 2021 budget he said: ‘it will take a long time to recover from this extraordinary situation, but we will recover.”
For further information on the budget 2021 visit: https://www.gov.uk/government/news/budget-2021-what-you-need-to-know
To find out if your business is eligible for a Restart Grant contact your local authority. You can find them https://www.gov.uk/find-local-council
Need more advice? Check out blog: We’re In This Together and to find out what’s happening next and how to prepare for reopening, stay tuned!