To record on p11d or not

Employer paid for gym benefit, but gym shut for covid.

Didn't find your answer?

A client continued to pay the gym memberships for employees, even after the gym closed due to Covid. The gym did not run any online classes etc so the employees technically received no benefit. I think the client felt sorry for the gym. 

I presume these are not taxable benefits for the months the gym was shut and therefore should be excluded from the P11d. 

 

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By David Ex
03rd Jul 2021 15:31

If the payments to the gym were voluntary then absolutely can’t see any BIK. No amount was being paid to provide a benefit.

Whether that then raises a W&E question about the tax deductibility of the payments is another question.

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By Hugo Fair
03rd Jul 2021 16:21

Conversely (as OP only says "I *think* the client felt sorry for the gym"), if contract with gym specified payments were due and the gym didn't specifically vary these terms ... then payments were still made on behalf of employee and so are a BiK!

The fact that the "gym did not run any online classes etc so employees technically received no benefit" is incorrect. The benefit is not provision of the service but payment of an employee's obligations (in this case to a gym).
[A vaguely comparable case would be a season ticket loan where trains kept being cancelled or employee couldn't use them ... which, unless train company refunds part of cost, remains a liability for the employee and hence a BiK].

What we don't know, of course, are the terms of the contract with the gym (or indeed whether the contract was with the employer or each employee), so a definitive conclusion here is impossible as it stands.

Where I do agree is with David's second sentence (again subject to the facts).

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By David Ex
03rd Jul 2021 16:38

Hugo Fair wrote:

Conversely (as OP only says "I *think* the client felt sorry for the gym"), if contract with gym specified payments were due and the gym didn't specifically vary these terms ... then payments were still made on behalf of employee and so are a BiK!

I wasn’t sure whether the OP was in a month by month arrangement and indeed if the contract would have been “frustrated” - a term I’d heard but can’t say I fully understand the implications of.

https://www.pinsentmasons.com/out-law/guides/english-contracts-frustrati...

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By lionofludesch
03rd Jul 2021 16:52

David Ex wrote:

Hugo Fair wrote:

Conversely (as OP only says "I *think* the client felt sorry for the gym"), if contract with gym specified payments were due and the gym didn't specifically vary these terms ... then payments were still made on behalf of employee and so are a BiK!

I wasn’t sure whether the OP was in a month by month arrangement and indeed if the contract would have been “frustrated” - a term I’d heard but can’t say I fully understand the implications of.

https://www.pinsentmasons.com/out-law/guides/english-contracts-frustrati...

"Frustration" simply means that one or both parties could not fulfil their obligations for reasons beyond their control.

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By Hugo Fair
03rd Jul 2021 17:05

IANAL but, as far as I'm aware, 'frustration' is terminology used in contract law ... and, broadly, relates to the non-delivery of the item/service for which consideration was contracted to be paid - particularly where this non-delivery is the result of outside factors/bodies.
If (and that's a big if) I'm right, then it could well be that the contract with the gym was frustrated (at least for some period).
However the result of that would be the possibility of the monthly payments being suspended (either voluntarily via a contract variation made by the gym, or because the employee sued or threatened to do so).
And my original point still holds IMHO ... by default the benefit (of paying the liability entered into by the employee) remains in place, so would still be a BiK.

In case it wasn't clear before, I was also suggesting that if the gym had agreed to suspend payments but the employer continued to make them (out of a sense of community spirit or whatever) ... then those payments would not be those for which the employee retained a liability, so of course would not be a BiK (until or if the gym dropped the charge).

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By lionofludesch
03rd Jul 2021 16:27

If the facts are as stated, I wouldn't be sticking this on anybody's P11d.

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By Hugo Fair
03rd Jul 2021 16:33

So what about a 'company car' that remained in employee's garage for a total of more than 3+ months during various full lockdowns?
HMRC have explicitly stated that this does not reduce the 'availability' of the benefit and so should not be reported (if using a P11D) as a reduction in the days available.

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By lionofludesch
03rd Jul 2021 16:47

Hugo Fair wrote:

So what about a 'company car' that remained in employee's garage for a total of more than 3+ months during various full lockdowns?
HMRC have explicitly stated that this does not reduce the 'availability' of the benefit and so should not be reported (if using a P11D) as a reduction in the days available.

Jeez - I never went three months without driving. Probably not even three days.
Lockdown must've been fierce in Hugo-Fair-land.

Gym's not open. It's not available.

Very straightforward.

Happy to put my case to a tribunal if HMRC think the loss in revenue is worthwhile.

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Replying to lionofludesch:
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By Hugo Fair
03rd Jul 2021 17:04

It may have been different where you live, but Hugo-Fair-land as you call it (or London as it's more commonly known) had several weeks last year when lockdown rules forbid the use of private cars (except for specific circumstances which didn't include 'because I felt like it' or in the Cummings episode 'to test my eyes').
If I'd lived in Bradford or areas near Manchester then the number of those weeks would have been considerably greater.
HMRC have explicitly stated (as part of a series of coronavirus 'support' docs) that 'unless the car and keys were returned to the company then it remained available and constituted a reportable BiK'.

FWIW I'm not arguing with you - simply expressing an opinion with which you don't concur. No idea who's right, although I don't think we're worlds apart ... but you've gone straight for the pragmatic solution, whilst I've tried to explore the underlying nuances.

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By lionofludesch
03rd Jul 2021 17:07

Hugo Fair wrote:

It may have been different where you live, but Hugo-Fair-land as you call it (or London as it's more commonly known) ......

Oh.

London.

It's a different world down there.

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By Hugo Fair
03rd Jul 2021 17:14

Well, yeah ... but it's the same pandemic and same HMRC and (currently) same PAYE regs etc.
Anyway, hope you're enjoying new-found freedoms now.

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By Tax Dragon
03rd Jul 2021 17:43

I wonder how long this thread will go on before someone looks up the rules. (This makes it a dozen replies now, and I don't think any of us has. I think if one of us did, the question would be answered a lot more quickly.)

As Hugo has already guessed, I have similar thoughts with very many threads.

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By David Ex
03rd Jul 2021 18:43

Tax Dragon wrote:

I wonder how long this thread will go on before someone looks up the rules. (This makes it a dozen replies now, and I don't think any of us has. I think if one of us did, the question would be answered a lot more quickly.)

Not sure we even have the facts with 100% certainty. Apart from the issue of the obligation to continue paying, or not, I assumed (which obviously one shouldn’t) that is was a corporate membership rather than the business paying the fees of employees.

OP said “continued to pay the gym memberships for employees” which is ambiguous on the point.

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By Tax Dragon
04th Jul 2021 06:52

I too would assume the contract is between gym and employer, otherwise we'd be talking about PAYE not P11d. So... s201 asks whether there was a benefit (at any point) in the tax year, s203 taxes the cash equivalent of that benefit and s204 tells you this means cost to employer. There's provision for reduction re unavailability where the benefit is the provision of an asset (s205A), but no similar provision I've spotted re gym membership.

The OP, as OPs often do, is making an assumption that seems to have no basis in law and Lion, as Lion often does, seems to be making up rules rather than looking them up. (If the gym was shut for the entire tax year, he might have an argument about the lack of benefit. Otherwise he needs to justify his suggestion from law.)

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By Tax Dragon
04th Jul 2021 07:14

I'd add that, if the BIK is the annual cost, then I wouldn't question deductibility of that cost.

Re Winnie's comment below, I agree that if the monthly payments are not part of the annual cost, then they're not part of the annual cost*.

In short, the law is clear (and I'm not interested in arguing guessed-at and made up facts).

*edit, more precisely the cost as determined in accordance with s204.

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By Mr_awol
06th Jul 2021 11:02

The law is fairly clear, but im not sure the answer is thus. Part of my reasoning is because im no longer sure whether i agree with your conclusion, largely due to your comment about it potentially making a difference if the gym was shut for the entire year.

For me, i would follow your logic that this must be a gym/e'er contract (corporate membership) to be a P11D benefit in the first place. I would also follow your route through S201/3/4. However S201(2) states that 'benefit' means "a benefit or facility of any kind" and as such i think the 'benefit' is the membership and not the access to the premises themselves (access to the gym being one of the benefits of the benefit, if you will).

So i say it's P11Dable whether the gym is open or closed, whether the e'ee was seconded abroad in a country where that gym has no sites, whether the e'ee was in a coma and unable to attend or whether the e'ee simply chooses not to go. They are a corporate member and the E'er has paid for the membership.

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By Tax Dragon
06th Jul 2021 12:09

Your difference isn't really with me (as I don't disagree with you), but with Lion. When I said that he might have an argument with the entire-year closure, I was more emphasising that, without such a closure, there was no argument at all, than intending to suggest I agreed with the argument in such a scenario.

Was the gym closed all year, do we know? If so, we can debate the question of whether a benefit or facility of any kind had in fact been provided.

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By Hugo Fair
06th Jul 2021 12:40

Since I know how much you enjoy unquantified hypotheses ... maybe there's a difference between whether membership is of a gym or of a health club (whose main facility normally is a gym)?
This is of course based on my supposition (better expressed by Awol) that the benefit of membership (as a BiK) exists irrespective of the benefits (in common parlance) derived by the member.
It's only just over a week ago (during that brief burst of summer sun) that I was eating a Bar-B-Q meal on a (socially distanced) lawn running down to the river. So what you might say? Well the grounds (and dining facilities and staff) all belonged to the rather swanky local Health Club, whose gym facilities remained closed although everything else was open to 'members only' (or at least to parties booked by a member - which I'm not).
Anyway, apologies in advance for getting you to read more unsupported thoughts ... but at least I can brag that I've eaten out for the first time in a year!

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By Mr_awol
06th Jul 2021 13:39

Arguably in your case the 'club' was open but ultimately i think thered have been a BIK anyway if your (corporate) membership had been provided by your employer.

As we're off piste, and i know TD likes us to go meandering from one hypothetical scenario to another - preferably out of context and with only a tenuous link - i have, for a few years, enjoyed a free 'benefit' (from my card issuer so not by virtue of employment, hence the tenuousness of the link) of lounge access before flights. In the last 18 months i havent been to an airport as i havent flown anywhere, so havent used this benefit. However, just because i didnt benefit from the benefit, doesnt mean i didnt have the benefit itself.........

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By lionofludesch
06th Jul 2021 13:45

Mr_awol wrote:

In the last 18 months i havent been to an airport as i havent flown anywhere, so havent used this benefit. However, just because i didnt benefit from the benefit, doesnt mean i didnt have the benefit itself.........

Did you pay tax on it?

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By Tax Dragon
06th Jul 2021 14:49

What's the cost to the employer?

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By Mr_awol
06th Jul 2021 15:05

lionofludesch wrote:

Did you pay tax on it?

No because as stated it wasn't an employment related perk, but a cardholder one. I only threw it in as a comparable to entertain TD and because i dont think there's much scope for arguing against the OPs initial situation being fully taxable (unless of course further info comes to light)

However, if my firm had paid a corporate subscription to enable me to make use of the same, I'd have paid tax on it. Same as i would if theyd provided any other benefits that i either chose not to use or was unable to make use of through incapacity, being too busy, providers being closed, etc.

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By Tax Dragon
06th Jul 2021 15:07

Medical insurance is an obvious one. All those employees too healthy to have time to 'use' it.

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By lionofludesch
06th Jul 2021 15:38

Tax Dragon wrote:

Medical insurance is an obvious one. All those employees too healthy to have time to 'use' it.

That's another rubbish analogy. Of the employee is badly, he can use he insurance.

If he wants to go to the gym, the door's still locked.

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By Tax Dragon
06th Jul 2021 16:01

lionofludesch wrote:

That's another rubbish analogy. Of the employee is badly, he can use he insurance.

If he wants to go to the gym, the door's still locked.

Can he though? Hospital's full of Covid patients.

But you're right. I don't like analogies.

(Btw just so I know what hypothetical non-analogy we're actually discussing [which knowledge presently escapes me], is it full yearlong unavailability or any part-time closure?)

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By lionofludesch
06th Jul 2021 15:29

Mr_awol wrote:

lionofludesch wrote:

Did you pay tax on it?

No because as stated it wasn't an employment related perk, but a cardholder one. I only threw it in as a comparable to entertain TD and because i dont think there's much scope for arguing against the OPs initial situation being fully taxable (unless of course further info comes to light)

However, if my firm had paid a corporate subscription to enable me to make use of the same, I'd have paid tax on it. Same as i would if theyd provided any other benefits that i either chose not to use or was unable to make use of through incapacity, being too busy, providers being closed, etc.

If you didn't pay tax on this benefit you never had anyway, I'm not seeing the whole scenario as in any way relevant.

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By Mr_awol
06th Jul 2021 21:56

lionofludesch wrote:

Mr_awol wrote:

lionofludesch wrote:

Did you pay tax on it?

No because as stated it wasn't an employment related perk, but a cardholder one. I only threw it in as a comparable to entertain TD and because i dont think there's much scope for arguing against the OPs initial situation being fully taxable (unless of course further info comes to light)

However, if my firm had paid a corporate subscription to enable me to make use of the same, I'd have paid tax on it. Same as i would if theyd provided any other benefits that i either chose not to use or was unable to make use of through incapacity, being too busy, providers being closed, etc.

If you didn't pay tax on this benefit you never had anyway, I'm not seeing the whole scenario as in any way relevant.

The point being I had a benefit - even though it was of no benefit to me.

A better one is my dual membership scenario. Even though it’s absolutely useless as adds no more features than already available from the personal subs / the corporate sub would still be taxable, no?

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By Tax Dragon
06th Jul 2021 14:57

If membership provides any benefit or facility other than being able to enter a gym, then again there's no argument.

Lion's argument is relevant if, and only if, at every point throughout the tax year there is no (common parlance) benefit or facility available. I'm pretty sure that even then HMRC would see a taxable BIK, but at least Lion would have something to go to Tribunal with. Otherwise... nothing.

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By Mr_awol
06th Jul 2021 15:17

Tax Dragon wrote:

If membership provides any benefit or facility other than being able to enter a gym, then again there's no argument.

Lion's argument is relevant if, and only if, at every point throughout the tax year there is no (common parlance) benefit or facility available. I'm pretty sure that even then HMRC would see a taxable BIK, but at least Lion would have something to go to Tribunal with. Otherwise... nothing.

Ive devised another way to test the thought process on this.

I had a membership to my local gym, who charge individual members £40 per month. I found out that the gym offers a corporate membership at £28 per month. Same access/benefits of membership but:
a) cheaper
b) Money can come from firm

If I didn't bother to stage it properly there would have been an overlap period where i actually had two memberships.

Now imagine that I'd actually forgotten to cancel the personal subscription. I might feasibly have had a personal and a corporate membership for the whole tax year. Technically i have "received no benefit" from having the Corporate membership as i could go anyway. However my firm would have paid £336 for my Corporate membership.

How much goes on my P11D? I'm saying the full £336 being the value of the membership the firm has paid on my behalf and which i have not made good.

Now what's the difference if i "receive no benefit" because the gym is closed, but have continued to be a corporate member, paid for by the firm?

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By Tax Dragon
06th Jul 2021 16:31

I don't think that thought experiment (or is it another analogy?) works.

I'm not going to argue Lion's case for him, but there's conceptually a difference between being provided with something you don't use and being provided with something you can't use because it is inherently unusable. That's the very nub of his argument.

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By lionofludesch
06th Jul 2021 17:17

Tax Dragon wrote:

I don't think that thought experiment (or is it another analogy?) works.

I'm not going to argue Lion's case for him, but there's conceptually a difference between being provided with something you don't use and being provided with something you can't use because it is inherently unusable. That's the very nub of his argument.

Or, put another way, how can I be provided with something that's not available to me?

I've been less than enthusiastic in arguing the case as the facts aren't entirely crystal clear.

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By Tax Dragon
06th Jul 2021 17:47

Facts shmacts. Hypotheticals are much more fun. That way we can discuss the rules.

(I hope I've correctly third-guessed what Hugo and Awol might have second-guessed I was going to say.)

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By Hugo Fair
06th Jul 2021 23:08

One final attempt ...

The rules (of tax law) seem clear to me - as per your earlier reference to all of Ch 10 of ITEPA 2003 ('latest' version) - in that the only place where a 'deduction for periods when unavailable for private use' is mentioned relates solely to Assets [s 205A].

There is an interesting exemption [S 261] whereby there is no liability to income tax in respect of the provision to an employee of benefits that are sporting or other recreational facilities - but this is subject to conditions that are only likely to be met if the employer is the provider of the facilities (similar to an in-house creche).

There are other rules however (of contract law) - as alluded to at the very start of this thread - which may be relevant to the question of 'fairness'. If membership has been frustrated (via lack of access to facilities), then (subject to the T&Cs of the contract) the member may well have the option to request a partial refund and/or threaten to sue for it.
However the only relevance of that scenario to the OP's question (regarding the amount to be notified in a P11D) would be IF such a threat resulted in a refund (thereby reducing the cost of the BiK).

In short, in the absence of any legislative reference to say otherwise, the payment of the membership fee is a BiK irrespective of whether the employee derived any 'benefit' from it - and, whether this was due to the employee's lack of will to do so or the provider's inability to deliver intended facilities, makes no difference.

One final analogy. If, as a kind gesture, the gym says that next year's annual membership fee will cover use of facilities for 18 months ... the BiK would remain the cost of the annual fee (not 1.5 times that cost).

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By Tax Dragon
07th Jul 2021 09:54

If I may be so bold as to pick out your most pertinent sentence, it is:

Hugo Fair wrote:

In short, in the absence of any legislative reference to say otherwise, the payment of the membership fee is a BiK irrespective of whether the employee derived any 'benefit' from it - and, whether this was due to the employee's lack of will to do so or the provider's inability to deliver intended facilities, makes no difference.

In particular, "whether this was due to the employee's lack of will to do so or the provider's inability to deliver intended facilities, makes [any] difference" summarises the argument.

I think HMRC would agree with you - no, it doesn't. I think a Tribunal would agree with HMRC.

But (being so bold as to restate Lion's restatement of my summary of his argument), if the provider has not been able to provide, what has been provided?

Although I want to leave that rhetorical, I need to answer to pose the follow-up question. What has been provided... Nothing. And is nothing a benefit or facility of any kind?

Here's a different scenario. Let's get out of the gym. An employee is taken hostage. The employer pays a ransom and secures the release. Whilst any normal human wouldn't even think of tax charges here, the employee has obtained a benefit (freedom) at a cost to the employer. Absent any exempting or relieving provision, it would seem to be taxable.

You may want to take a breather before you read on, just to quiet your feeling of moral repugnancy at what I've just said.

Calm? Then read on: Now, suppose the employer pays a ransom but fails to secure the release. There's a cost to the employer intended to provide a benefit, but it fails to deliver. (What was provided? Nothing.) Is the cost of that nothing taxable?

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By Hugo Fair
07th Jul 2021 10:47

I suspect I'm beginning to understand a little better the agonies of addiction ... as I stifle a deep sigh and pick up my virtual pen once more in search of intellectual fulfilment (any hope of practical solutions on this thread having long departed)!

Anyway, despite the disquietude brought on by your tales of hostages (dragons are obviously brought up to ignore any emotional aspects to a situation), there's likely to be a wholly new problem that you've introduced ... in that, so far as I know, the act of paying a ransom is (in most countries) illegal. Would that not place its cost outside of tax laws (for BiKs or indeed CT)?

Nevertheless your point is well made ... "What was provided? Nothing. Is the cost of that nothing taxable?"

Whilst I can't quite believe I've ended up arguing HMRC's case for them, I think the answer is Yes. Why? Because it's not true that nothing has been provided; it is the value of what has been provided that has diminished (and may or may not have actually reached a value of zero - although that is hard to determine given that value is in the eye of the beholder, or in this case the recipient).

But value isn't part of the definitions or rules around BiKs (provision and cost are, but not value).

So, back to the gym and a scenario closer to the OP's reality. Employer pays for membership by employee. Employee rolls up (he's overweight) at gym next day ... but is met by sign on door saying "Closed until discovery of asbestos in ceiling tiles has been rectified." He sighs, looks at his (treasured) membership card and goes back to work - where he proudly displays the card on his Dilbert-like cubicle.

He knows not when (or indeed if) the gym will re-open ... his only benefit so far is membership ... the value of that benefit has plummeted to zero (or possibly 1p for the card) ... all he can do is await news of the gym's hoped-for re-opening.
But in the meantime he is in receipt of a (near valueless) BiK, which ITEPA says is taxable.

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By Tax Dragon
07th Jul 2021 11:12

Hugo Fair wrote:

it's not true that nothing has been provided

I do love a double-negative. Does this one mean that 'something' was provided (even though I cannot tell you what that something is)?

If that is factually correct, then your tax analysis is spot on. I think we all (maybe not yet Lion?) agree on that. As facts are for Tribunals to determine, I have nothing (he-he) more to add.

(Except an irrelevant aside: I happen to know that ransom payments are not CT-deductible, you are correct. But I don't think they're necessarily not taxable under ITEPA.)

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By Mr_awol
06th Jul 2021 22:05

I’m still trying to break the link between a benefit and something of benefit - or benefiting from something. I’m convinced there’s a difference and that a membership can be separated from the access to a building (or indeed any other perks) which that come as a part of that membership.

Although maybe I shouldn’t have added perks into the mix

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By Tax Dragon
07th Jul 2021 10:01

What if membership lies with the employer and employees derive (one/some of) the benefits (use of the gym) of their employer's membership? (Or in fact they don't, in this case.) Other than that, you've lost me slightly.

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By Mr_awol
07th Jul 2021 15:18

I typed a response. It was a work of art and i was going to put a finishing touch to is and it would have settled this issue to everyone's satisfaction i am sure. Unfortunately i closed all windows, time has moved on (by several hours) and i cant quite recall the brilliance of the original wording.

Where (i believe) the 'closed gyms are of no benefit' argument falls down is that the employer is not paying for the provision of sporting facilities for their employees - if they were, then these would (subject to other conditions being met) be exempt. Obviously the end goal of the employer's payment is that the employee can use such facilities/equipment but what they are paying for - what they are buying - is a membership. The employee has received that membership, regardless of whether or not they have, or even could have, used the associated services.

The crux of my (now lost) insightful post, therefore, was that the membership itself is a benefit or facility provided to the employee, and that has a cost, which is used to quantify the taxes due, and so the circle of life (and taxes) is complete. As Hugo has since said, the 'value' of the benefit is irrelevant.

What might be creating a small amount of disagreement (edit - this is, i believe, what you refer to in your last post) is the structure of corporate memberships. Every gym or sports club where i have ever held a membership, even corporate members are 'named' and as such my position makes sense. Moving to (yet) another analogy - which lion wont like because it is another banking one - i have a particular account with my bank which used to have a lot more benefits than it now does, and amongst them were a free coffee at Patisserie Valerie and an English Heritage corporate membership. Neither of these were subscriptions in my name - i simply had to waive my bank card and/or show an app on my phone and I'm on a free caffeine hit or wandering round some castle looking at old relics. Now, if an employer signed up to a similar scheme whereby all of their employees were able to gain access to a castle, a gym, or anything else, just by waiving their staff ID then i would agree that no benefit had been provided if those locations had been closed all year and therefore we do not need to move on to stage two and quantify cost. However ive never seen a gym offer corporate membership on that basis and don't think they do - as such ive ignored it in my ramblings until now.

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By lionofludesch
07th Jul 2021 15:16

Mr_awol wrote:

I typed a response. It was a work of art and i was going to put a finishing touch to is and it would have settled this issue to everyone's satisfaction i am sure. Unfortunately i closed all windows, time has moved on (by several hours) and i cant quite recall the brilliance of the original wording.

Where (i believe) the 'closed gyms are of no benefit' argument falls down is that the employer is not paying for the provision of sporting facilities for their employees - if they were, then these would (subject to other conditions being met) be exempt. Obviously the end goal of the employer's payment is that the employee can use such facilities/equipment but what they are paying for - what they are buying - is a membership. The employee has received that membership, regardless of whether or not they have, or even could have, used the associated services.

The crux of my (now lost) insightful post, therefore, was that the membership itself is a benefit or facility provided to the employee, and that has a cost, which is used to quantify the taxes due, and so the circle of life (and taxes) is complete. As Hugo has since said, the 'value' of the benefit is irrelevant.

What might be creating a small amount of disagreement is the structure of corporate memberships. Every gym or sports club where i have ever held a membership, even corporate members are 'named' and as such the above makes sense. Moving to (yet) another analogy - which lion wont like because it is another banking one - i have a particular account with my bank which used to have a lot more benefits than it now does, and amongst them were a free coffee at Patisserie Valerie and an English Heritage corporate membership. Neither of these were subscriptions in my name - i simply had to waive my bank card and/or show an app on my phone and I'm on a free caffeine hit or wandering round some castle looking at old relics. Now, if an employer signed up to a similar scheme whereby all of their employees were able to gain access to a castle, a gym, or anything else, just by waiving their staff ID then i would agree that no benefit had been provided and therefore we do not need to move on to stage two and quantify cost. However ive never seen a gym offer corporate membership on that basis and dont believe they do - as such ive ignored it in my ramblings until now.

I'm still struggling with the concept that the opportunity to go to a gym is a benefit.

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Replying to lionofludesch:
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By Tax Dragon
07th Jul 2021 15:21

lionofludesch wrote:

I'm still struggling with the concept that the opportunity to go to a gym is a benefit.

They have bars there. (Not all of them asymmetric.)

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Replying to lionofludesch:
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By Mr_awol
07th Jul 2021 15:25

lionofludesch wrote:

I'm still struggling with the concept that the opportunity to go to a gym is a benefit.

It isn't the opportunity to go to the gym.

It's a membership - in your name - that you haven't had to pay for. The subscription has been paid on your behalf and you were on the gym's books as an active member. The employer has done their bit in providing it. The gym owner has (possibly through no fault of their own) made that subscription worthless. You could have paid the subscription yourself and it would still have been worthless - but your employer has saved you having to do that by adding you to their list of eligible employees.

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Replying to Mr_awol:
RLI
By lionofludesch
07th Jul 2021 15:45

Mr_awol wrote:

lionofludesch wrote:

I'm still struggling with the concept that the opportunity to go to a gym is a benefit.

It isn't the opportunity to go to the gym.

It's a membership - in your name - that you haven't had to pay for. The subscription has been paid on your behalf ......

Nothing to do with me. I wouldn't want to be a member of a gym. I'm plenty fit enough. I would be explaining to my employer that I'd rather have the money he wasted.

That's probably the answer. Employer pays under a PSA. It's his error. He should pay the tax.

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Replying to Tax Dragon:
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By Mr_awol
06th Jul 2021 13:32

Ah that makes sense.

I doubt the gym was closed for the entire year, in which case it's probably irrelevant - but if for any reason it had been, i still reckon the 'benefit' of membership would have been provided and as such subject to tax. Obviously im happy for Lion (or anyone else) to tell me why im wrong on that front but I will take some convincing if anyone tries to suggest that no benefit has arisen (although i accept that the e'ee might not have got any benefit from the benefit this year.

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By Winnie Wiggleroom
04th Jul 2021 06:43

The fundamental question is, what exactly was the employer paying for?
If he was paying for something that was not available to any employee then was he really paying for a gym membership?
Presumably the gym did not require monthly fees to be paid in order to keep an active membership for some future time for all members, and therefore these payments were being made voluntarily. In which case they are not being made for the benefit of any employee.
If the employer had taken advice before making the payments, possibly he could have been advised to cancel his monthly subscriptions and make ad hoc non specific "goodwill" payments if he wished which would have marked a clear difference between the new arrangement and the old.
If however the gym did require payments to continue (unlikely) it will be BIK, all be it that the benefit comes at a later date.
Again making assumptions, but one would assume that no employees asked for their subscription to be cancelled so that they would not have a BIK, which they could have done of course.

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By exceljockey
05th Jul 2021 10:03

Hi all

Thanks for the responses. I have gone back to the employer and asked what the situation was with the gym. I update this thread when I know whether:
1. The payments were voluntary or,
2. Simply an oversight in that they were not stopped when the gym shut. They haven't been refunded and the contract has started again (from April 2021)so I am assuming there is no dispute.

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Replying to exceljockey:
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By Hugo Fair
05th Jul 2021 11:36

For the avoidance of further/future doubt, it would be helpful if the employer could also confirm:
3. With whom the Gym had a contract (Employer or individual Employees)?; and
4. What is specified (if anything) as to services made available due to membership?

Fundamentally does the contract provide for suspension or refund of payments?

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