Can My Company Pay for My Gym Membership?

I was chatting to someone recently who assumed their gym membership could never go through their limited company.

"It's personal though, surely?"

Fair question.

It's unlikely you are going to the gym to meet a client. You are going because you want to exercise.

But that does not automatically mean your company cannot pay for it.

The more useful question is: "Does it make financial sense for my company to pay for it?"

And, unfortunately, this is another one where the answer really is… it depends.

Let's say your gym costs £100 a month

That is £1,200 over the year.

You have two options.

You could pay the £100 personally every month.

Or your limited company could pay the membership for you.

If the company pays, a normal commercial gym membership will usually be treated as a Benefit in Kind.

That basically means HMRC recognises that the company has given you something with a personal benefit.

It is not tax-free.

But "not tax-free" and "bad idea" are not the same thing.

Why might the company route still work?

Think about what has to happen if you pay the £1,200 yourself.

The money starts in your company.

The company may pay Corporation Tax on its profits.

You then need to get enough money out of the company personally to cover the membership.

If you take that money as dividends, there may then be dividend tax to pay too.

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.

Now compare that with the company paying the gym directly.

There will still be tax to consider because it is a Benefit in Kind, and the company may also have National Insurance to pay.

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.

So is putting my gym membership through the company a tax trick?

No.

You are not suddenly making your gym membership "tax-free".

That is the important distinction.

If you see somebody online saying: "Put your gym membership through the company and save tax!" — please do not assume that applies to you.

The company paying it creates its own tax consequences.

The question is whether those consequences are better or worse than taking extra money out of the company and paying for it personally.

What about a workplace gym?

There is a separate exemption for certain sports and recreational facilities provided by an employer and made available to employees generally.

So, for example, a qualifying gym provided at or through the workplace can sometimes be tax-free.

That is different from the company simply paying for your individual membership at the local David Lloyd or PureGym.

So, can my company pay for my gym?

Yes.

The company can pay for it.

But for a normal personal gym membership, you should expect there to be tax and reporting to consider.

That still does not automatically make it the wrong option.

Sometimes paying for something through the company can be more efficient than taking extra money out personally and then paying for it yourself.

Sometimes it cannot.

So before you move your gym Direct Debit onto the company card, ask us to run the numbers.

Because "Can the company pay for it?" is only half the question.

The better one is: "What is the best way for me to pay for it?"