Gyms: VAT
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the 2023 changes to VAT on gym memberships on independent gyms.
Answered by Dan Tomlinson
In 2023, the courts decided that sports and leisure services supplied by local authorities are non-business activities and are not subject to VAT.
There was no change in the VAT treatment of gym membership. However, before the change was implemented for local authority services, HMRC analysed in detail the relevant economic circumstances of the sports and leisure sector, and the conclusion was that removing the requirement to charge VAT on local authority sports and leisure activities would not significantly distort competition in the sector, partly because the sector was already subject to significant structural variations for reasons not confined to tax or VAT.
Following the 2023 change, HMRC held a series of positive meetings with stakeholders from the sector to address any concerns or questions that they had about the change.
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