Corporate gym membership

I would like to treat my staff with a bonus this Christmas and was considering a corporate gym membership at a local health club.  Will my staff have to pay any tax or National Insurance on the amount I pay for their membership?

1st January 2011

If you provide your staff with access to sporting or recreational facilities, this can be a tax free benefit in kind for the employees providing that certain conditions are met, although gym membership is unlikely to qualify.

The facilities must be available for use by all of your firm's employees and must not be available to the general public.  The facilities do not have to be used exclusively by your firm's employees though, so if you jointly offer the facility with another firm and their employees use the facilities too, the membership is still tax free.

The cost of the membership is not tax free where the facilities are open to the public, or based at a private residence or holiday accomodation, or where the membership provides you with use of a vehicle (which includes boats and aircraft).

You may wish to consider securing preferential rates at your local health club or gym rather than offering to meet the full cost of the membership, as the provision of the membership will be a taxable benefit in kind and your staff will be taxed on the amount you pay on their behalf. 

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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