Can somebody please advise me how you would have to treat the cost of a gym membership paid by the business? Note that the cost of the gym membership also allows free 24 hour parking for the person which allows access to the place of work?
Also, should the gym membership be taken on the business name or the individuals name - bearing in mind it allows access to parking which is used when in office (Note office is located in busy city centre location)
Any advice on this issue would be much appreciated.
the expense is not wholly, necessarily and exclusively for the purpose of the business it having duality of purpose.
HMRC would regard the parking as a side effect rather than cause of the purchase.
Your client should either
(a) seek to gain the parking for the price of the Gym membership and ensure Gym membership is actually excluded from the agreement. Or,
(b) it should go to the DLA.
The only reason that the client would have for not choosing option (a) would be if the gym membership was the reason for the cost in which case they just answered the question for you.
If the parking is not available without the gym membership then you need to look at the price of membership compared to parking. If it around the same for a parking season ticket and gym membership then they client should opt for the parking.
If the gym membership is a lot cheaper then it would be best to contact HMRC and get their permission to take this approach towards this expense. If you explain that their tax take will be greater if they go for the gym option they may be accomodating.
The parking should be taken in the business name.
Gym membership which includes free parking should be in the individuals name unless HMRC agree to the exception in this instance.
That's my take on the scenario but I'm sure that others will have a different view of matters so hold on in there for alternate answers before making a call on this.
Kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
