Gym membership with work space

[bobbo mcbobbo]

Howdy. I have a VAT registered LTD company. I am the director and have no employees. I'm looking at a Virgin Active gym membership that has a big coworking space. I will use this as my primary place of work. Can I claim it as a business expense, paid before corp tax and claim VAT?

 

[Scalloway]

Will the primary purpose for taking the gym membership be to use the coworking space?

 

[bobbo mcbobbo]

Yes, it's a very nice work space, close to home with the added benefit of being able to use the gym right next to where I work.

 

[STDFR33]

The company can pay for it but a BIK arises.

 

[UK Contractor Accountant]

salary sacrifice the monthly membership fee and all will be ok.

 

[TheCyclingProgrammer]

Deductible for corporation tax purposes - yes. But incurs a BIK as mentioned above so will be taxable on you personally. VAT should be fully reclaimable I think.

 

[BeauLacey]

salary sacrifice the monthly membership fee and all will be ok.

you can no longer operate gym membership via salary sacrifice

 

[Paul Kelly ICHYB]

What will their invoices say? Gym membership or workspace?

 

[UK Contractor Accountant]

you can no longer operate gym membership via salary sacrifice

well they should continue as an 'excluded exemption'. Get fit & healthy and less strain on the NHS.

I think I am going to lobby Boris, Sajid & Dominic on this one - they can put a slogan on the battle bus!

 

[TheCyclingProgrammer]

What will their invoices say? Gym membership or workspace?

Would it matter? If it includes a gym membership for the director then it would be treated as a BIK.

 

[Paul Kelly ICHYB]

If the invoice/subscription is for workspace, that is what they are paying for.

Primary use?

If you get free coffee at your workspace, do you have to declare each cup you take?

 

[STDFR33]

If the invoice/subscription is for workspace, that is what they are paying for.

Primary use?

If you get free coffee at your workspace, do you have to declare each cup you take?

If you buy a Ford Mondeo but the dealer puts 'van' on the invoice, do you think it should be treated as a van for Vat and BIK purposes?

 

[Paul Kelly ICHYB]

@STDFR33 If they joined primarily to use the coworking space, that is what should take precedence.

Ultimately, I don't think they did, and, in any case, the person they pay for financial advice should be the one answering this!!!!

 

[TheCyclingProgrammer]

If the invoice/subscription is for workspace, that is what they are paying for.

Primary use?

If you get free coffee at your workspace, do you have to declare each cup you take?

They aren't at all comparable. Coffee at a workspace is a trivial benefit and employers are allowed to provide basic kitchen/tea/coffee facilities for employees without there being a taxable BIK.

It doesn't matter what the invoice says, if what they are actually receiving is workspace + gym access for the director then this should be declared as a BIK on the director's P11D.

Even if they claim they don't use it, the fact that it is available to them would likely mean HMRC would treat it as a BIK. If you think HMRC would give this a pass because the invoice doesn't mention "gym membership" well good luck with that. You *might* get away with it in an inspection but I wouldn't hold my breath. HMRC would probably (and quite rightly) argue that if all that was required as a workspace for the director to use there are plenty of other facilities that did not include a gym membership that they could have chosen.

 

[Financial-Modeller]

I'm with @consultant on this.

I have worked in offices with gym, dry cleaning, subsidised restaurant, games room, etc provided for free to employees and contractors. No BIK issues for either.

If the company is providing office space, and invoicing for office space/hotdesking, and there is complimentary use of a gym, HMRC should have no issue with the cost of it deducted for CT purposes.

Regus offer this at some of their facilities.

However, in the OP's case, if the company is primarily providing gym facilities, and invoicing for gym membership, HMRC would not unreasonably object to the OP saying that the cost is for office space.

 

[Adam93]

I'm with @consultant on this.

I have worked in offices with gym, dry cleaning, subsidised restaurant, games room, etc provided for free to employees and contractors. No BIK issues for either.

If the company is providing office space, and invoicing for office space/hotdesking, and there is complimentary use of a gym, HMRC should have no issue with the cost of it deducted for CT purposes.

Regus offer this at some of their facilities.

However, in the OP's case, if the company is primarily providing gym facilities, and invoicing for gym membership, HMRC would not unreasonably object to the OP saying that the cost is for office space.

The law disagrees with ‘consultant’ and that is what matters unfortunately.

https://www.gov.uk/expenses-benefits-sporting-recreational-facilities/whats-exempt

it would have to be an in-house gym, not one available to the general public. P11d benefit in kind. A just and reasonable apportionment should be made for the cost of the gym and work space.

As for the deductibility for CT, it will probably be okay, but it could be interpreted as client entertainment, but unlikely.