Can I pay for a gym membership through a limited company?

A frequently asked question by company owners is whether or not a gym membership is an allowable business expense.

The short answer is that your company can pay for a gym membership, but in most circumstances the cost will be treated as a taxable benefit in kind. This can result in additional tax for both the company and the director.

In this guide, Kerry Newman, Head of SG Accounting, explains the rules and whether paying for membership through your company ever makes financial sense.

What does ‘allowable’ mean?

In theory, a company can pay for virtually anything, but the question is whether the purchase can be legitimately offset against its Corporation Tax bill. Is it ‘allowable’ in the sense that the cost can be offset against the company’s profits or not?

Only expenses which have been incurred ‘wholly and exclusively’ for the purposes of running a business normally qualify for Corporation Tax relief.

If an expense has a ‘duality of purpose’ (i.e. mixed business and personal use), or is a personal expense, it may not qualify as an ordinary business expense.

However, there’s an important distinction when a company provides something to its directors or employees as part of their remuneration.

You can often deduct the cost of providing an employee benefit when calculating company profits, even though the benefit itself may be taxable for the individual receiving it.

For more information, see our guide to limited company expenses.

So, how are gym memberships treated for tax purposes?

For most company owners, it is hard to justify an ordinary gym membership as a business expense in its own right.

Possible exceptions may arise where using specialist fitness facilities is genuinely integral to the trade, for example in certain sporting or fitness professions. Even then, you need to consider the circumstances carefully.

For most contractors, including IT consultants and other professionals, going to the gym is considered a personal activity, even if keeping fit helps you perform better at work.

As we mentioned earlier, you may still decide to pay for your gym membership via your company.

In this case, the cost of membership will normally be treated as a benefit in kind, although the precise tax and National Insurance treatment depends on who arranges and pays for the membership.

Gym membership as a benefit in kind – how is this taxed?

If your limited company contracts directly with a gym to provide membership for you as a director or employee, it will normally need to report the value of the benefit to HMRC, generally through Form P11D unless the benefit is being taxed through payroll.

The director pays Income Tax on the taxable value of the benefit at their applicable rate, while the company pays Class 1A employers’ National Insurance.

For the 2026/27 tax year, Class 1A National Insurance is charged at 15%.

The rules differ if you arrange the membership personally and your company pays the gym on your behalf. In that case, Class 1 National Insurance will generally apply instead.

If you pay for your own membership and the company reimburses you, the reimbursement is normally treated as earnings, subject to PAYE Income Tax and Class 1 National Insurance.

You can read more in our guide to P11D forms and benefits in kind.

HMRC also provides specific guidance on club memberships paid for by employers.

What about a company-provided gym?

There is an exemption for qualifying sporting and recreational facilities provided by an employer.

For example, a company that provides gym facilities for its employees may be able to do so without creating a taxable benefit, provided the facilities meet several conditions.

Among other things, the facilities must be available generally to employees, used mainly by qualifying employees and their families, and not available to the general public.

An ordinary membership at a commercial gym doesn’t qualify simply because the company pays for it.

For most small limited companies, particularly those with only one director, this exemption is unlikely to be a practical route to providing a conventional gym membership tax-free.

See HMRC’s guidance on sporting and recreational facilities.

When is it worthwhile paying for membership via your company?

Some gyms offer corporate discounts on memberships, so you may be better off, or no worse off, paying via your business rather than as an individual.

This all depends on your situation, and the numbers involved:

• What type of corporate discount can you secure?
• Which income tax band are you in?
• How much employer’s National Insurance will your company pay?
• What Corporation Tax relief is available?
• Is it worth dealing with the additional benefit reporting and payroll administration for minimal savings?

In some cases, the Corporation Tax relief and corporate discount may make company-funded membership worth considering, despite the benefit-in-kind charge.

But there isn’t an automatic tax advantage to putting a personal gym membership through your limited company.

If you’re considering it, ask your accountant to compare the overall cost of company funding with simply paying for a personal membership.