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
Arts and Entertainment
Ben Stiller as Derek Zoolander in the leaked trailer for Zoolander 2
film
Sport
footballArsenal take the Community Shield thanks to a sensational strike from Alex Oxlade-Chamberlain
Arts and Entertainment
Gemma Chan as synth Anita in Humans
film
News
Keeping it friendly: Tom Cruise on ‘The Daily Show’ with Jon Stewart
people
Arts and Entertainment
Ensemble cast: Jamie McCartney with ‘The Great Wall of Vagina’
artBritish artist Jamie McCartney explains a work that is designed to put women's minds at rest
News
Republican Presidential Candidate Donald Trump
people
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen