Tax & Accounting News

Claiming back tax on ‘recreational benefits’

12/05/2010

In an effort to promote healthy lifestyles, a little-known tax benefit has been brought in, allowing ‘recreational benefits’ to be taxed as a benefit-in-kind (BiK).

It was thought that this exemption would largely apply to gym memberships, but it may be the case that other sporting or leisure pursuits could also be claimed for.

For example, some directors or employers may provide their employees with tax-free use of sports and recreational facilities, such as cycling, sailing or golf. However, the law states that for a recreational benefit to be tax exempt, the facility must not be available to the general public.

In the case of other recreational pursuits, this could pose a problem. If cycling was taking place in a park, or sailing on a lake, those facilities would obviously be open to the public; however, a potential loophole may be that HMRC has stated the tax exemption may still apply if restrictions are only available to a ‘restricted’ section of the public – so presumably, activities taking place somewhere like a sailing or golf club could still be claimed for.

For more information, please contact us.