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Fitness industry braced for disappointment over tax relief on gym memberships

By Matthew Campelli    21 Nov 2016
Hammond is set to deliver his first Autumn Statement as chancellor on Wednesday (23 November)

Employees using in-house corporate gyms may be about to lose a benefit allowing them to take up membership without paying income tax.

According to a report in The Telegraph, chancellor Philip Hammond will announce a cut to “salary sacrifice” schemes that allow employees to trade part of their wages for other benefits.

Those using in-house gyms – which currently qualify for tax relief under the salary sacrifice scheme – would have to pay an additional sum each year for their membership, as part of the measures expected to be unveiled during Wednesday’s (23 November) Autumn Statement.

ukactive has been lobbying the government to extend this salary sacrifice scheme to support membership of high street gyms, and has carried out a full cost benefit analysis of this scenario which shows a net gain for the Treasury.

However, with existing corporate gym memberships’ salary sacrifice schemes likely to be scrapped, there are question marks around whether ukactive’s proposed scheme will ever see the light of day.

Free health checks may also be scrapped. However, private health insurance and cycle to work initiatives are likely to be unaffected.

If the government pledges its commitment to continue to support private health insurance at the same time as scrapping benefits which encourage a healthy lifestyle, it will be a slap in the face for the health and fitness industry, which has been hard at work promoting prevention.

Liz Terry, editorial director of Health Club Management magazine, said: “ukactive has proven that extending salary sacrifice to high street gym memberships would bring net gain to the treasury, so it’s illogical for government to be heading in the opposite direction.”

“We have to convince this government that self-care is a responsibility taken by the individual, encouraged by the government and supported by the employer.”

“If the chancellor follows through with this plan and leaves private health insurance in place, but begins to tax gym membership and health checks, then the government is once again veering away from prevention and towards a mindset where people are encouraged to neglect themselves and then look to the NHS to 'fix' them at huge expense.”

“We need a healthy, active and engaged population, driving a thriving economy if we are to fight our way through Brexit and people need all the encouragement they can get to remain healthy,” said Terry.

The chancellor is under pressure to balance the books, particularly in the face of an expected “£100bn Brexit black hole” in the nation’s finances.

Salary sacrifice schemes enable employees to pay for qualifying services before tax and national insurance, cutting off a source of revenue for the Treasury. Shutting down these schemes would see that money being collected by the exchequer.

In March the government kicked off a review of salary sacrifice in a bid to stamp out perceived abuse of the system.

The Treasury declined to comment to HCM about the Autumn Statement in advance.

Goverment  Philip Hammond  gyms  health  fitness  ukactive 
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