I thought I would quickly present the notes of that session here, and expand them a little. They are articulated from three distinct view points – those of an Accountant, those of a Yoga Teacher / Studio owner, and those of a Yoga practitioner with an ethical focus.
Its not forever – this disruption will pass, and we will be back to running our businesses. Yes we may need to change things, maybe smaller class sizes, maybe more emphasis on sanitisation, but normality in our businesses will – one day – return.
Government support – I’ve already written a lot about this, but here is an overview:
- Rates grants – only available if you have business premises that are assessed to Business Rates
- £10k all businesses below £15k Rateable Value
- £25k businesses in Retail Hospitality and Leisure sectors with Rateable value between £15k and £51k
- Business Rates Holiday for businesses in Retail Hospitality and Leisure sectors
- Self Employed Income Support Scheme
- Only if Self Employed before April 2019
- Average profits must be less than £50k
- Self Employment is the majority of your income
- Pays 80% of profits or £2,500 whichever the lower
- Runs for three 3 months
- Can continue working
- Will need to demonstrate loss of income due to Coronavirus
- Job Retention Scheme – the concept of “furlough”
- Must have been on payroll at 28th February 2020
- 80% of salary or £2,500 whichever the lower
- Scheme runs for up to 3 months
- Not able to to work for employer during furlough
- Directors eligible – can do statutory duties for company
- Protection from eviction from commercial landlords if you are unable to meet your rent
- Business support loans – with interest subsidy and guarantee by Government. But banks are still looking for property backed guarantees from directors.
- VAT Deferral – all businesses for three months, must settle arrears by March 2021, and need to cancel your VAT Direct Debit
- Self Assessment Deferral – deferral of July 2020 Self Assessment payment – your January 2021 payment will go up.
- With the VAT and Self Assessment this enables you to use funds saved for tax to support your business, but plan ahead to make the amounts up for 2021.
- Universal Credit – support of last resort for the Self Employed and Director / Shareholders.
Ask for help
- Landlords – some will help, some will not, but its worth asking for a rent holiday or deferral. From a landlords perspective a loss of a quarters rent now to keep a tenant in place for the next few years isn’t a bad option.
- Suppliers – again time to pay or deferrals
- HMRC time to pay for taxes other than VAT and Self Assessment
- Bank loan – as above
- Accountant – we have been very busy as a firm supporting clients
- Friend – need someone to talk to? Sometimes a problem shared is a problem halved
- If cash flow is very bad in your business and you can’t meet debts, you will need to consult an Insolvency practitioner
Use savings and plan to replace them
- This could be rainy day funds, tax funds or pension funds
- This is OK if you have a strategy to replace them – think about cash flow for next two yars
- Get taxes done so liabilities known – most of the Coronavirus impact will be in 2020/21 so January 2021 Self Assessment payments unlikely to change much – tax payments will dip in January 2020 depending on impact of Coronavirus on your business versus Government grants which are taxable
Short term borrowing – to keep the business afloat till restrictions are released
- Cards – watch high interest rates, but OK as a short term stop gap
- Personal Loans from bank – possibly less paperwork than business loans
- Family loans
- Business bank loan
Use the time off productively
- Keep in contact with students / clients
- Write some social media content for reopening – I’m planning and drafting a years worth of social media
- Record some routines for YouTube – useful for students now, a promotional reference tool for the future
- Sort our your library – I’ve Bayed a lot of books I won’t want to read again
- Decorate your studio
- CPD – plenty of online options, get it out of the way for a year – leave the in person CPD for 12 months
- Website and integrations – work on your website and integrations like booking systems
- Do the things you’ve been putting off
- Self practice
- Get your taxes done – many people put them off till November, December or January, but as well as using time productively this will help you estimate liabilties
Business retreat at home – take some time to work on the businesses, not in it
- How can I be better prepared for next time there is a disruption of this nature or, indeed, if Coronavirus flares up again in a few months time
- What do I need to change going forward in my business – is it working for me? Is this the business I wanted?
- Get off the treadmill – take a break, think where you want to be. Maybe keep some online work going? Change Schedule?
And Finally – with apologies for the vernacular Shit Happens – and it Gets Flushed Away – in other words the current situation will change, and we will, at some stage, get back to a more stable business environment.