What Is An Allowable Expense?
Allowable Expenses are expenses that HMRC allows taxpayers to deduct from their income to arrive at the taxable income figure meaning that they reduce your tax bill.
Examples include office expenses, travel costs, and other business-related expenses. Since they are deducted from the income figure, they leave HMRC with a lesser amount to tax and reduce the tax liability of the taxpayer.
Is Gym Membership An Allowable Expense?
Gym membership is usually not an allowable or deductible expense for tax purposes and does not reduce the tax liability. However, in circumstances where it directly relates to the business or the profession of the individual, it becomes an allowable expense and can be deducted for tax purposes.
The key point here is that you must be able to justify that the gym membership is an essential expense for your business or occupation. There are no hard and fast rules underpinned by HMRC and is somewhat a matter of common sense.
For example, athletes, models, actors, or people with extremely tough jobs are required to work out in order to maintain, improve or gain a competitive edge in their professions hence gym memberships for such professionals can be justified.
On the other hand, gym membership for a person who works a normal 9-5 corporate job is not justifiable because the profession neither requires above-average fitness nor an attractive physical appearance.
However, if you are running an organization with tens or hundreds of employees, and want to provide fitness facilities including an in-house gym, table tennis, or other sports, you can offer such facilities to your employees tax-free and can deduct these expenses from your income.
However, if you use a third-party facilitator, or agree to pay your employees’ gym or other sports club memberships, HMRC does not have explicit rules for such benefits and you might not be able to deduct these expenses from your income.
