Gym membership through my Ltd

[jmo21]

I've not dealt with any BIK's through my Ltd as yet, so have been doing a bit of research.

Is it as simple as my Ltd Co paying NIC contributions on the value of the membership? (and filling in the appropriate forms of course)
http://www.hmrc.gov.uk/PAYE/employee-bik.htm

Do many of you give yourselves BIK's like gym membership in this way?

[Gonzo]

Do many of you give yourselves BIK's like gym membership in this way?

I never did.

Surely the NI payable would be more than the corporation tax saved if you put BIKs through the company?

[jmo21]

I believe the Class 1A NI is 12.8% (07-08 rate from http://www.hmrc.gov.uk/employers/rat..._limits.htm#11 I can't find this years rate just now)

so for example if membership is £300

12.8% of £300 = £38.40

Corp Tax at £21% of £300 would have been = £63

and the saving is the difference £24.60

But I'm not sure if this calculation is correct, I may be missing something entirely in that calculation, which is why I am looking for advice

If that is correct, it's obviously not a huge amount, and I suppose another question is, is it worth it? any flags to HMRC?

[Platypus]

The benefit also counts as your income, therefore subject to income tax and employee's NI

EDIT: Gym membership seems exempt!
http://www.hmrc.gov.uk/employers/ebi...ilities-01.htm

[DimPrawn]

I think the main gain from running a gym membership through your ltd (employer) is when joining a gym, ask for corporate rates and usually you can get a good deal by having your employer sign up rather than you as an individual. Might even 1/2 the membership fee.

[blacjac]

The benefit also counts as your income, therefore subject to income tax and employee's NI

EDIT: Gym membership seems exempt!
http://www.hmrc.gov.uk/employers/ebi...ilities-01.htm

Apparantly not...


I discussed this with my accountant a couple of years ago, his take on it is that the above link only applies to Employer owned gym's that are not open to the public (e.g. the employer builds a gym on site), and not for membership to a public gym

[TCL]

Gym membership seems exempt!
http://www.hmrc.gov.uk/employers/ebi...ilities-01.htm

I have an interest in this, but I interpret the HMRC guidelines as applying to an employer's onsite gym:

"Where the employer provides sporting or recreational facilities that are available to all employees but not available to the public"

Wouldn't your general everyday gym (Greens, Bannatynes etc) count as a facility that is available to the general public (albeit the paying public, but the disticntion isn't made)

I guess the reason this springs to mind in my case is my wife is a member of Curves, a women-only gym. So I couldn't sign up for it too if I set up a corporate gig with them. Even so, its still "available to the public"

Prolly best to ring HMRC for clarification.

EDIT: seems blacjac arrived at the same conclusion as i was typing my post!

[jmo21]

At the bottom of the link, it also says:

"This will also apply if the employer provides vouchers that can be redeemed or exchanged for the use of sporting or recreational facilities and the same conditions are met – see EIM16105 and NIM02416."

the links for EIM16105 and NIM02416 aren't particularly conclusive or easy to follow, they link off to other pages.

In the absence of anyone actually doing this, I'll just ask my accountant

[NickNick]

A few years back SWMBO's company closed their onsite gym (and turned it into a smoking room) and bought everyone at that site a membership to a local gym * that was classed as a BIK for SWMBO and she was taxed accordingly. I can't see much difference between that and what the OP was on about.

NN

*Well, technically they bought x 'floating' memberships and hoped that x was greater than the number of people actually wanting to use the gym. It was far greater so they reduced x in the following year.

[FiveTimes]

I think the main gain from running a gym membership through your ltd (employer) is when joining a gym, ask for corporate rates and usually you can get a good deal by having your employer sign up rather than you as an individual. Might even 1/2 the membership fee.

I contacted my local gym and they offered some great rates for corporate membership. When I asked about payment they said they would happily accept payment from personal account.

so my advise would be to register in the companies name to get the discount and just pay normally.