13 March 2019

During April 2019, new rules being enforced involving the National Minimum Wage, tax, pensions and payslips, apprenticeship fees, maternity/paternity pay and sick pay will call for salon and barbershop owners to make adjustments to their business. The NHF/NBF provides a roundup of the key changes:

1. National Minimum Wage

The rise of the National Minimum Wage and the National Living Wage rates on April 1 2019 will affect hair, beauty and barber businesses across the country.

The NHF/NBF is urging employers to check staff are being paid at the right rates and to take advice before making deductions from wages. Employers can be fined £20,000 for each employee who is not paid the correct amount and could also be publicly named and shamed by the government.

Here are the new National Minimum Wage (NMW) and National Living Wage (NLW) rates that apply from 1 April 2019:

National Minimum Wage 2019

Find out more about NMW/NLW here www.nhf.info/nmw-rise 

2. Maternity pay

Statutory Maternity, Adoption, Paternity, and Shared Parental Pay are all set to rise from April 2019. Statutory Sick Pay (SSP) will also rise.

For 2019/20, Statutory Maternity Pay (SMP) for the first six weeks will be 90% of the employee’s average weekly earnings, followed by £148.68 or 90% of the employee’s average weekly earnings, whichever is lower. (The 2018/19 rate was £145.18) The same figures apply to Statutory Adoption Pay (SAP).

Paternity Pay and Shared Parental Pay for 2019/20

Statutory Paternity Pay and Statutory Shared Parental Pay will rise to £148.68 or 90% of weekly earnings, whichever is lower. (The 2018/19 rate was £145.18)

3. Statutory Sick Pay

From April 2019, Statutory Sick Pay will rise to £94.25 a week. (The 2018/19 rate was £92.05.)

Employees must earn at least £118 a week to qualify. (The previous lower earnings rate was £116.)

4. Making Tax Digital

Salon and barbershop businesses that are VAT registered will have to keep their VAT business records digitally and send in VAT returns using Making Tax Digital (MTD) compatible software from 1 April 2019. This also applies for those using the VAT Flat Rate Scheme.

Find out more about Making Tax Digital by visiting: www.nhf.info/MTD or visit www.gov.uk/guidance/making-tax-digital-for-vat to find MTD-compatible software available.

5. Pension contributions

From 6 April 2019, the total minimum contributions employers and employees must pay into a workplace pensions scheme will increase from 5% to 8%. Employers must make a minimum contribution of 3% and employees must make a minimum contribution of 5%. Employers can choose to pay more and reduce the amount their staff need to pay as long as the total contributions still come to 8%.

Find out more about here www.nhf.info/workplacepensions

6. Payslips

The law regarding payslips is changing from 6 April 2019 and will mean that itemised payslips will now need to be given to all employees. Payslips must include the total number of hours worked or a breakdown of hours paid for different types of work and/or different rates of pay.

Find out more here www.nhf.info/payslips

Hilary Hall, NHF/NBF chief executive said:

“Making these changes in the run-up to April will be a very busy time for salon owners. 

“That’s why our free 24/7 helpline is so valuable to NHF/NBF Members.  Not only does the helpline provide practical advice on employing and managing people, there’s also advice on payroll, tax and VAT, all available at the end of the phone.”