Corporate gym membership tax consequences

Blonde Accountant
Blonde Accountant Feels At HomeRegistered Posts: 86
A ltd company client is considering getting a corporate gym membership for herself and employees. As it's a corporate membership, the fees would be offered at a cheaper rate to the employees. My questions are, which is better for the employees, for the cost to be declared on a p11d or to be put through as salary? Also can the company claim the vat on the cost of the membership?

Hope that makes sense


  • MarieNoelle
    MarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,433
    I would say if the membership is arranged and paid for by the company, it is a reportable P11D benefit (liable to income tax only and no NIC for the employee but liable to class 1A NIC for the employer).
    If it's paid by the employee and subsequently reimbursed it counts as earnings so liable to PAYE and NIC (ee and er).

    Unsure about the VAT but I can't see why it couldn't be reclaimed?
    Blonde Accountant
  • Blonde Accountant
    Blonde Accountant Feels At Home Registered Posts: 86
    edited October 2014
    Thanks for that, it helps. :)
    I'm not fully sure how this works, but the membership is with David Lloyd and from what I can gather they offer it at a reduced rate to the employees, so I'm not sure if the company will pay a flat fee for this service, then the employees pay directly to David Lloyd. I have been asked to find out the best option for the employees tax/ni wise but without it ending up costing the employer a small fortune.
  • Blonde Accountant
    Blonde Accountant Feels At Home Registered Posts: 86

    So I'm back on this, but a slightly different aspect, the employees are sorted, but the client has now said that she will pay for membership for all of the employees and myself and another contractor. My question now is, how do I personally account for this? I am a sole trader, so how does it work for me, the other contractor has his own ltd company so would he deal with it differently? I hope that is clear. Thanks for reading.
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