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HMRC internal manual

VAT Input Tax

Specific issues: sports and recreational facilities available to staff in general

Some businesses provide sports and recreational facilities to their staff. Where these are available to all employees, whether or not for a charge, the VAT incurred on the cost of providing them is input tax. It is not our policy to apply the Supply of Services Order.

In principle there might be an output tax charge because of private use by the employee. However, because such private use is incidental to the business use, no such charge will arise.

Businesses may be unable to provide suitable facilities within their own organisation. They may choose instead to provide membership for their employees at external gyms and sports clubs. Where this is provided to all employees there is no onward supply under the Supply of Services Order.

There is an onward supply under the Supplies of Services Order where membership of a golf club, health club or similar organisation is provided as a perk to specific employees (see VIT25000).