Devon hairdresser risks losing salon after being told to pay back government grant
A Devon hairdresser is at risk of losing her salon because she says she has been told to pay back a government grant after reinvesting it in her business.
Michaela Haghir, who owns Beauty and the Bleach in Bideford, was given £3,600 from HMRC to furlough two members of staff due to the pandemic.
The Coronavirus Job Retention Scheme (CJRS) payment was granted in May following an investigation in which she proved she employs two members of staff.
Michaela had initially been advised she was not eligible to claim CJRS because she had not submitted her real-time information payroll data by the cut-off date of 19 March 2020.
However, in June she was told the payment should not have been made and that it would be regarded as an overpayment.
By then she had already invested money received from the government’s Bounce Back Loan into the business so she has no cash reserves to fall back upon.
An investigation has now been launched, and Michaela fears it could be the end of her four-year business if she has to pay it back.
The single mum said: “I'm at risk of losing my business and I'm absolutely distraught that they can do this. I've put my blood, sweat, and tears into the business and have earned nothing since lockdown.
“I'm entitled to nothing as my turn over isn’t high enough. The £10,000 grant I did receive was spent on rent and bills, and now I'm expected to magic £3,600 out of thin air for a mistake they apparently have made."
“Even though it was a genuine mistake not made by myself but a clerical error made by the person doing my payroll not once did HMRC ever ask me why I was paying the extra cash in national insurance contributions, taxes, and NEST pension, which I am up to date with.
“When Covid-19 hit, I tried to furlough two employed members of my staff. I was declined because unknown to me, the employees' hours had not been put through on the real-time information payroll data system."
While it was being investigated, Michaela applied for a Bounce Back Loan (BBL) in case she couldn't pay her staff their wages.
She said; “We eventually had a call from HMRC informing us that they had investigated and were happy with the information we had provided and would ‘override’ the decision and I was now eligible for furlough.
“I got a back payment of £3,600 so I decided I would use the £3,000 BBL to upgrade my salon.”
However, after completing the works, this month Michaela says she was told by HMRC that the payment was a mistake on their behalf and she would be required to pay back the £3,600.
An HMRC spokesperson said: “We can confirm we are looking into this matter and will respond to the claimant accordingly.
“Furloughed employees must have been notified to HMRC on a Real-Time Information submission on or before March 19, 2020.
“If an employer believes there have been mistakes or unreasonable delays with their application caused by HMRC, they should follow our complaints process which can be found on our website."