These are certainly testing times for our industry at the moment. Friday’s (20th March 2020 Government announcement imposing closures of facilities and premises in the health and fitness sector with immediate effect. This was also given at the same time as announcing a raft of measures helping smaller companies and sole traders to ride out the financial consequences of the weeks ahead.
Gary White (Finance Director at ClubRight) has over 30 years of experience in running businesses. He has helped scores of businesses over the years and is actively involved currently as a director across six companies in sectors ranging from fitness, healthcare and technology.
Gary has kindly summarised the announcements (up to 20th March 2020) and prepared a guide below for gym and club owners. He discusses opportunities, practical help, advice and interpretation along the way.
- 1. Firstly, there will be no self-assessment payments required by taxpayers in July this year. This has been deferred until January 2021 with no formal arrangement required to do so with HMRC. This applies to all taxpayers, not just the self-employed, so will include tax on dividends extracted by company owners.
- 2. If your club or company is VAT registered, no VAT return payments are required before the end of June 2020 – meaning an effective 3-month holiday is available. Presumably, there will be preferential repayment periods to catch up thereafter. Therefore, nobody should therefore pay their VAT due on 31st of March or 7th of April as normally payable.
- 3. The biggest boost to the health and gym sector are to do with those renting smaller premises. It has been announced that retail, hospitality and leisure businesses in commercial premises of a rateable value of between £15,000 and £51,000 are eligible for immediate relief from business rates for the next 12 months and can obtain a grant of £25,000. Businesses using premises of a rateable value of below £15,000 are eligible for immediate relief from business rates for the next 12 months and are able obtain a grant of £10,000.
- Details on these are to follow very soon and there is talk of some local authorities, (such as East Riding) already writing to businesses and asking them to provide their bank details for funds transfers. Click here for useful information here on the latter area.
- Remember to stay vigilant when looking at any emails that you receive from people claiming to be from local authorities asking for your sensitive information (bank details etc.). Local authorities should always have bank details on file from when you pay business rates. For more info, visit smallbusiness.co.uk.
- 4. The Coronavirus Business Interruption Loan Scheme (CBILS), has been introduced which enables banks to lend quickly to affected businesses on preferential interest rates that are government guaranteed and repayable over periods of between three months and ten years.
Further information on these emergency funding measures, which can just include overdraft facilities in reserve in case – which Gary would suggest is the preferred option. That way, you only incur interest if actually utilising it. Businesses can borrow up to £5m under this new scheme, and it’s available for all businesses with turnover of up to £45m. There will be certain industry sectors excluded and these will be specified this week when more detail on this scheme is published. Learn more about applying for a Coronavirus Business Intervention Loan here.
- 5. If you have employees that cannot work at your premises but you would like to continue paying them, you can get back 80% of their cost from HMRC; up to a maximum of £2500 per employee per month. This is limited to 80% presumably because you will still get tax relief on the payment you make to the employees concerned and/or they would have paid tax on those monies anyway. More detail on that scheme is to be announced also but see detail here.
For those who operate as sole traders, please see here regarding potential assistance.
Gary knows only too well the stresses and difficulties of owning and running a business, and we want everyone in the ClubRight ecosystem to know that he’s here to help.
Gary is available to help and advise any business owner that currently uses ClubRight gym software free of charge through this difficult period. He has a large supply of template documents for cash flow forecasts, agreements and more to help your business remain solvent and trading (where possible) through this period of uncertainty.
You can watch Gary’s brief video on discussing some of the above mentioned points here.
