Can My Company Pay for My Gym Membership?

<p>I was chatting to someone recently who assumed their gym membership could never go through their limited company.</p><p>"It's personal though, surely?"</p><p>Fair question.</p><p>It's unlikely you are going to the gym to meet a client. You are going because you want to exercise.</p><p>But that does not automatically mean your company cannot pay for it.</p><p>The more useful question is: "Does it make financial sense for my company to pay for it?"</p><p>And, unfortunately, this is another one where the answer really is… it depends.</p><h2>Let's say your gym costs £100 a month</h2><p>That is £1,200 over the year.</p><p>You have two options.</p><p>You could pay the £100 personally every month.</p><p>Or your limited company could pay the membership for you.</p><p>If the company pays, a normal commercial gym membership will usually be treated as a Benefit in Kind.</p><p>That basically means HMRC recognises that the company has given you something with a personal benefit.</p><p>It is not tax-free.</p><p>But "not tax-free" and "bad idea" are not the same thing.</p><h2>Why might the company route still work?</h2><p>Think about what has to happen if you pay the £1,200 yourself.</p><p>The money starts in your company.</p><p>The company may pay Corporation Tax on its profits.</p><p>You then need to get enough money out of the company personally to cover the membership.</p><p>If you take that money as dividends, there may then be dividend tax to pay too.</p><p>By the time £100 reaches your personal bank account to pay the gym, the business may have needed to earn considerably more than £100 in the first place.</p><p>Now compare that with the company paying the gym directly.</p><p>There will still be tax to consider because it is a Benefit in Kind, and the company may also have National Insurance to pay.</p><p>But depending on your Corporation Tax rate, your personal tax position and the way you normally take money from the company, it can sometimes still work out better overall.</p><h2>So is putting my gym membership through the company a tax trick?</h2><p>No.</p><p>You are not suddenly making your gym membership "tax-free".</p><p>That is the important distinction.</p><p>If you see somebody online saying: "Put your gym membership through the company and save tax!" — please do not assume that applies to you.</p><p>The company paying it creates its own tax consequences.</p><p>The question is whether those consequences are better or worse than taking extra money out of the company and paying for it personally.</p><h2>What about a workplace gym?</h2><p>There is a separate exemption for certain sports and recreational facilities provided by an employer and made available to employees generally.</p><p>So, for example, a qualifying gym provided at or through the workplace can sometimes be tax-free.</p><p>That is different from the company simply paying for your individual membership at the local David Lloyd or PureGym.</p><h2>So, can my company pay for my gym?</h2><p>Yes.</p><p>The company can pay for it.</p><p>But for a normal personal gym membership, you should expect there to be tax and reporting to consider.</p><p>That still does not automatically make it the wrong option.</p><p>Sometimes paying for something through the company can be more efficient than taking extra money out personally and then paying for it yourself.</p><p>Sometimes it cannot.</p><p>So before you move your gym Direct Debit onto the company card, ask us to run the numbers.</p><p>Because "Can the company pay for it?" is only half the question.</p><p>The better one is: "What is the best way for me to pay for it?"</p>