TaxCorporate TaxTaxman stands firm on gym membership VAT

Taxman stands firm on gym membership VAT

Gym memberships will be hit by VAT if it covers VAT payable services such as saunas, insists HMRC

Gym membership fees could be hit with VAT, Baker Tilly has warned.

The firm said that the taxman was looking to charge VAT on monthly and annual
charges payments to gyms and leisure centres, even though leisure centres run by
trusts should be exempt.

‘Only access to the health suite e.g. sauna and steam room, should be subject
to VAT,’ said Baker Tilly head of tax George Bull.

‘Nonetheless, HMRC are trying to apply the decision in Highland Council to
all leisure centres, including those run by leisure trusts, and are raising
assessments for underpaid VAT.

‘Despite the “healthy living” agenda, this is sure to act as disincentive to
people thinking of starting exercising or adopting a healthier lifestyle.’

HMRC said gyms could structure memberships between VAT applicable and VAT
exempt services.

‘Sporting facilities provided by eligible bodies have been exempt from VAT
since 2000 and remain so. Some of those facilities provided by other bodies
(including local authorities) are taxable while others may be exempt and this
will also continue to be the case,’ stated HMRC.

‘HMRC’s approach to leisure trusts has not changed since the
Court
of Session decision in May 2007
in the case of Highland Council.’

Further reading:

View
HMRC’s take on gym VAT

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