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HMRC internal manual

Employment Income Manual

Particular benefits: exemption for sports and recreation facilities: general

Section 261 and 262 ITEPA 2003

No charge on earnings as employment income arises from the provision by employers for employees, former employees or members of their families or households (see EIM20504) of:

  • qualifying sports or recreational facilities (Section 261(2) ITEPA 2003), or
  • non-cash vouchers (see EIM16040) exchangeable only for the use of such facilities.

A qualifying sports or recreational benefit or facility is one that:

  • is available generally to all the employees of the employer concerned (Section 261(3) - facilities provided for a few, selected employees only do not qualify) and
  • is not available to members of the public generally (Section 261(4)) and
  • is used wholly or mainly by employees or former employees and members of their families or household (Section 261(5)).

The exemption also applies to a recreational facility provided to an employee by a third party if the employee is working at the premises of the third party. For example, a contract worker employed by A, who works on site at employer B, is exempt from a benefits charge if he uses recreational facilities provided by B for its employees.