Leisure Opportunities
Job search
Job Search
see all jobs
Latest job opportunities
New Hall School
£25,000pa + excellent benefits
Chelmsford, Essex
Everyone Active
Competitive rates of pay
South Oxhey Leisure Centre, Watford
City of London Corporation
£40,056 - £44,934pa + local govt pension + benefits
Epping Forest, Essex

New Agency Agreements could see UK leisure trusts saving £78 million a year in VAT

A ruling on VAT in March has returned millions to local authorities that manage leisure facilities in-house
Now a potential 'Agency Agreement' set-up is being proposed for use by local authorities that outsource operations to not-for-profit trusts
If successful it could benefit trusts by up to £78 million a year across the UK
The 'Agency Agreement' model is being developed by Max Associates, PSTax and law firm Trowers and Hamlins
Job opportunities
New Hall School
£25,000pa + excellent benefits
location: Chelmsford, Essex, United Kingdom
more jobs

A proposed change to the way councils organise the operation of their leisure facilities – including gyms and health clubs – could see not-for-profit leisure trusts benefitting from up to £78 million of VAT savings a year across the UK.

The proposed changes, which would involve the creation of 'Agency Agreements' between trusts and councils, have been prompted by a successful legal challenge to VAT legislation which happened in March this year, when local authorities managing facilities in-house won a court ruling reclassifying facility visits as ‘non-business’’, meaning they no longer have to pay VAT on income and can reclaim VAT incurred on related costs.

The ruling was estimated to save councils millions and impact 20 per cent of leisure centres in the UK.

However, although the change represented a huge windfall for local authorities, it left not-for-profit trusts, such as GLL, stuck in middle ground, as they can already reclaim VAT on activity income, but still have to pay corresponding – and irrecoverable – VAT on expenditure.

Lisa Forsyth, MD at strategic consultancy, Max Associates, explains: “Initially, when HMRC announced VAT revisions back in March, the only beneficiaries were local authorities managing in-house leisure services.

“As a result, some trusts are developing an ‘Agency Agreement’ which could see them collecting income on behalf of the local authority as its ‘agent’. In this scenario, income remains ‘non-business’, meaning VAT on expenditure could be reclaimed by them as well.

“The impact for the sector could be huge,” she said. “Community Leisure UK (CLUK) estimates there are 780 not-for-profit trusts in this sector. If all were to benefit from a new agency agreement model, the financial benefit would be between £50,000 and £100,000 per facility, or £39 – £78 million per annum in total across the sector.

Max Associates is working with a team of VAT advisers at PSTax and local government specialists from law firm Trowers and Hamlins to consider the principles of how an agency agreement could be presented to satisfy HMRC and meet legal and procurement requirements.

The three organisations have published a briefing about the March changes to VAT and how a new agency agreement model might work for trusts. It can be downloaded here.

If successful, the introduction of agency agreements would further concern private sector health and fitness operators, who already believe they have been disadvantaged by the March ruling and would leave them as the only operators in the sector not to be benefitting from VAT breaks.

Following the March ruling, it was thought that private sector operators might appeal on the grounds of the decision being anti-competitive, as this was one of the parameters considered by the courts, however, no case has yet been brought.

HMRC is thought to be reconsidering the scope of the March VAT treatment ruling and in a pre-emptive move to avoid a legal challenge from commercial providers, is considering imposing conditions on local authorities wanting to adopt the protocol, so the matter is clearly far from resolved.

Sign up for FREE ezines, news alerts & magazines
Related news

Legal ruling scraps VAT on gym memberships for councils in the UK

18 May 2023
Councils in the UK will benefit from hundreds of thousands of pounds of extra revenue ...
A proposed change to the way councils organise the operation of their leisure facilities –  including gyms and health clubs – could see not-for-profit leisure trusts benefitting from up to £78 million of VAT savings a year across the UK.

More News

1 - 15 of 44,314
01 Mar 2024
The first bricks and mortar Kinrgy studio opens today (1 March) in West Hollywood. Founded by Emmy Award-winning dancer, Julianne Hough, the brand started as ... More
29 Feb 2024
Orangetheory and Self Esteem Brands have revealed plans to merge 'as equals' creating a new company with around US$3.5 billion a year in sales and ... More
29 Feb 2024
In the same week as tennis legend, Andre Agassi, was appointed to the board of Life Time, the company has released strong year-end results, achieving ... More
28 Feb 2024
According to a pilot study by Yale School of Medicine, exercise can not only slow down the neurodegeneration associated with Parkinson’s Disease, there is evidence ... More
28 Feb 2024
Self Esteem Brands (SEB), owner of Anytime Fitness, has released year-end results which show year-on-year revenues up by 12.3 per cent and the launch of ... More
28 Feb 2024
Basic-Fit has introduced a new approach to tackle gymtimidation and create an inclusive environment in its clubs. The ‘Be Comfortable’ programme includes behavioural guidelines for ... More
27 Feb 2024
Speaking exclusively in the current issue of HCM magazine, Third Space CEO, Colin Waggett, says he is feeling optimistic, as the company gears up to ... More
27 Feb 2024
Australian exercise and active health trade body, AUSactive, has partnered with the national Royal Life Saving and Swimming Pool & Spa Association to develop a ... More
26 Feb 2024
Kerzner International has ushered in a new era of wellness-centric hospitality and unveiled its highly-anticipated flagship Siro resort in Dubai. Situated within the striking One ... More
26 Feb 2024
Following a successful pilot, The Gym Group is rolling out a programme, delivered by The Well HQ, educating its trainers on how best to support ... More
23 Feb 2024
As Planet Fitness announces strong year-end results there are reports the company is planning a move into the Spanish market. CFO Tom Fitzgerald is also ... More
23 Feb 2024
The ICO has ruled that eight leisure operators have been unlawfully processing the biometric data of their employees to be used for attendance checks and ... More
22 Feb 2024
Xponential Fitness has told HCM it will vigorously defend itself against claims made in a class action lawsuit being brought against the company for financial ... More
22 Feb 2024
“2024 is going to the be biggest year for Gymshark ever,” says CEO and founder, Ben Francis following the release of year-end results that were ... More
21 Feb 2024
More consumers are realising meditation is beneficial, but many give up because it’s difficult to master the mind. The Muse headset has been designed to ... More
1 - 15 of 44,314