George Osborne presented the first Spring Budget of this Parliament on Wednesday 16th March. As is now commonly the case most of the headline items had been either flagged up in advance or were “leaked” to the press in the months and days leading up to his speech.
Again a number of the items came into force immediately with others delayed until future years in the hope that these will go unnoticed when they finally start to bite.
As is so often the case most of the announcements will have little impact directly on Golf Clubs but in so far as they affect their member’s pockets then Clubs do need to take notice of these. Whilst this budget may have made little change to individuals spending power, the continuing squeeze on public expenditure and the imposition of additional taxes will gradually erode Clubs income.
The specific items that may benefit clubs in the short term are hard to find. For most clubs the reduction in tax rates to 19% for 2017 to 2019 and 17% for 2020 will have little impact as most only pay tax on interest and property income. There is some increasing evidence of a tougher line from HMRC on identifying trading activities in Clubs so perhaps this will be more beneficial in future years.
From 6th April 2016 employers NIC’s for apprentices under 25 are 0%. Where Clubs can employ apprentices who are working towards a government recognised scheme this can represent a significant saving, In addition the NIC employment allowance increases to £3000 from 6th April 2016 which will help with the extra costs of the National Living Wage.
The new rates of Stamp duty on commercial property which have introduced a taper arrangement will help any Clubs looking at property transactions or lease negotiations and the proposed business rates relief will possibly provide some saving though this will have less impact in London and South East England.
Fortunately this current chancellor seems happy to support the drinks industry and kept Beer and Spirits duty unchanged though those who enjoy a drop of wine will have been less impressed. I expect however that prices will still have to rise during 2016 and this in turn will need to be passed on to members. A recent survey showed an improvement in bar and catering revenues in 2015 so lets hope this will continue in 2016.
On the negative side auto enrolment will start to impact Clubs in 2016 and the costs of this will gradually increase over coming years as the government tries to reduce the burden of pension provision by transferring this to employers and individuals. With the age profile of most clubs still heavily stacked towards the over 50s the impact of reducing pension savings is already starting to have some influence on membership levels and the new contributions from both Employers and Employees will not make much difference other than increasing Clubs costs.
I suppose Clubs should be grateful that most of the other announcements did not have any direct effect but as detailed above it is perhaps more important to consider the impact on Clubs members. Whilst in the main the budget was publicised as being helpful to small business any help in most cases will only go towards covering the additional costs announced in previous years.
I would like to be more hopeful for the UK economy and for Clubs but I fear that there are still many uncertainties in the world economy which could impact the UK and ultimately the members pockets which is where the majority of Clubs funds originate.