With January here in full swing, many people start a new year with big goals, one of which is often related to fitness. Business owners now understand that there is a correlation between a fit body and a better business, so they are more often looking into having a fitness routine that can help them to achieve this. However, paying £1,000 for a gym membership out of their own personal taxed income is the equivalent to needing an additional gross income from the company of £1,724, so is it actually cheaper if the company pays for it instead? ⠀The normal rules are that if the company pays for your gym membership, then you will still be taxed on the value of it, and additionally the company will have to pay National Insurance at 13.8%. However, even though you may be taxed on the membership, it could still be worth your while getting the company to pay for it. Unlike with a salary, you have no NI to pay, with just the NI savings alone making it cheaper for your company to pay the gym membership on your behalf. But there are even greater savings to be had if it can be treated as a tax-free benefit.How can this be achieved? In simple terms, sports and recreational facilities can be provided tax free if they are:
The way to make this work for the company as a whole, and to reap the tax saving benefits is potentially to have a fitness session for your team early in the morning, lunch, or after work in the evening. This ticks all of the boxes that are required for it to be a tax-free benefit, and it’s a great way to boost the fitness level of the team, plus it’s a great boost to the team building muscle too!
