INPUT TAX - 30.11.2023

Can we claim input tax on gym membership scheme?

Q. As part of our strategy to improve the health and fitness of our staff, we have signed a twelve-month contract with a local gym for corporate membership. The gym is VAT registered but can we claim input tax on the fee?

A. If a sporting or recreational facility is provided to all employees - which is clearly the case with a corporate membership scheme - then input tax can be claimed on the expense without output tax being payable on the benefit provided. The expense is deemed to be for the business purpose of rewarding and motivating your staff.

However, there would be a problem if a specific employee was given free membership as part of, perhaps, their remuneration package. Output tax would now be payable on the value of this facility provided to the individual, which will cancel out the input tax claim.

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