Gym bosses warm up for battle over VAT burden

Industry says cutting tax on memberships would improve nation's health, reports James Ashton

The fitness industry is limbering up for a campaign to cut taxes on gym membership, arguing a move could reduce the strain on the National Health Service.

Bosses want keep-fit enthusiasts to be exempt from the standard 20 per cent VAT rate, which is levied on monthly subscriptions.

In a push that is expected to gather momentum this autumn, they will press for a reduced tax rate of 5 per cent, enough to cut the price of a typical monthly pass from £45 to £40.

Andy Cosslett, the chief executive of gym chain Fitness First, said: "We are not ready to discuss this with government just yet because we have got other priorities, but the fact remains everyone can see the health budget is unsustainable, the nation needs to get fitter, and yet we are penalising companies that are providing health and fitness products because we are charging them as a luxury item."

The reduction would bring gym membership into line with protein foods, some health supplements and nicotine patches.

After-school clubs are also subject to the levy, unless they are run by the school in question and not an outside agency.

Mr Cosslett added: "I just don't see any downside other than a little bit of money to the Exchequer, but it would promote the story that fitness is important – it's just an example of joined-up government.

"If you want to stimulate people's health and fitness, give them something that motivates them to do it," he said.

The idea for a cut, which is expected to be championed by trade body UK Active, is not new. A decade ago, accountants at KPMG said the introduction of US-style tax breaks to encourage gym membership – beyond the benefits already offered by companies' in-house gyms – would tackle rising levels of obesity.

Peter Roberts, the chief executive of Pure Gym, the low-cost operator acquired by CCMP Capital Advisors in May, also supports a cut in VAT for the sector. He said: "It would definitely make a difference. Particularly in areas where affordability is key for households, then every penny that you can reduce the fees by the more likely you are to get people to join and take regular exercise."

The gym industry also has its own vested interest in broadening appeal and increasing loyalty. Only 12 per cent of Britons are gym members, and membership turnover is high as half of all people with a subscription quit every year.

After three years in the job, Chancellor George Osborne has grown used to being lobbied furiously by different parts of the business world. Last week, it was the turn of the tourist industry to call for a reduction in VAT from 20 per cent to 5 per cent, making it easier for hotels and attractions to compete with rivals in Italy and France where taxation is lower. The CutTourismVAT campaign, spearheaded by the British Hospitality Association, said its proposed tax reduction would generate £4bn in new revenue.

The March Budget brought cheer for the brewing industry when the Chancellor scrapped the alcohol duty escalator which added inflation plus 2 per cent to the price of a pint. A longer-running campaign by the London Stock Exchange also claimed success when the stamp duty on trading shares listed on the junior Alternative Investment Market was abolished.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living