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HMRC internal manual

VAT Government and Public Bodies

Other local authority activities: sport and leisure: supplies of sporting services

Although the majority of sporting services are exempted from VAT by the Value Added Tax (Sport, Physical Education and Fund-Raising Events) Order 1994, local authorities are specifically excluded. Sporting services provided by local authorities therefore remain taxable.

Nevertheless, where the sporting services include an element of educational training or instruction they may qualify as exempt supplies of education as local authorities are eligible bodies within the meaning of Group 6 of Schedule 9 to the VAT Act 1994. Education includes badminton coaching, dancing classes, swimming lessons, and the like. It requires classes to be led or directed rather than merely supervised.

For example, a local authority will normally supply instruction in the use of equipment and in warming-up techniques in a multigym particularly when a person first enrols. This instruction, together with any assessment that forms part of it, is education. But if the authority charges an individual to use the gym without instruction, the supply is no longer education. Similarly, if the authority charges for leisure sessions in a swimming pool, without instruction, the supply does not amount to education.

In both these cases staff are likely to be present for supervision on health and safety and insurance grounds but not to provide coaching. In these circumstances the authority is charging for admission and so the use of the facility is liable to VAT.

Provision of local authority leisure facilities are exempt in cases where Note 16, Group 1 of Schedule 9 dis-applies item 1(m). This applies where the grant of facilities for playing any sport or participating in any physical recreation is for either:

  • a continuous period of use exceeding 24 hours, or
  • (subject to conditions) a series of ten or more periods, whether or not exceeding 24 hours in total.

For further information about the letting of sports facilities see the VAT Land and Property Guidance  VATLP19000.