Tax relief for gym costs?

By | 12 April 2022

It may be tempting for self-employed individuals to claim tax deductions for expenditure that is not ‘wholly and exclusively’ for the purposes of their trade, profession or vocation.

Unfortunately, the tax rules generally preclude a deduction for such expenditure.

Mixed use

However, if an expense has a mixed (i.e., business and private) purpose, the tax rules permit a deduction for any identifiable part or proportion of the expense which is incurred wholly and exclusively for the trade, etc. This is helpful for some expenses, but not all.

For example, if the self-employed individual uses their own car for business and private purposes, the business proportion of motoring costs can be ascertained if a record of business and total mileage is maintained.

Dual purpose

On the other hand, if payment is made for a single item and the expenditure is incapable of division into trade and non-trade related parts, no deduction can be claimed in respect of any part of it; HM Revenue and Customs (HMRC) considers that there is an ‘intrinsic duality of purpose’ (see HMRC’s Business Income manual at BIM37940).

For example, the costs of enjoying or restoring good health is not generally allowable (Norman v Golder [1944] 26 TC 293). HMRC guidance states: ‘There will almost always be a personal purpose in wishing to enjoy better health.’ This would generally rule out the cost of a gym membership; but not always.

In Osborne v Revenue and Customs [2020] UKFTT 373 (TC), the taxpayer was an experienced saturation diver in his late 40s (saturation diving is a diving technique that allows deep sea divers to reduce the risk of decompression). His self-assessment return for the tax year 2016/17 included a claim to the cost of his gym membership (£21 per month), in addition to his expenses in travelling to and from the gym and his weekly outdoor exercise. In HMRC’s view, there was a clear personal/non-trade purpose, and it was therefore considered that the gym membership and associated travel expenditure were not allowable.

However, the First-tier Tribunal found that the taxpayer’s only motive for his fitness training was to maintain the level of lung, heart and muscular fitness required to work safely as a member of a saturation diving team. Those measures were a matter of physical necessity for saturation divers. The tribunal concluded: (1) The taxpayer had established that his only purpose in undertaking his fitness training was to enable him to work as a saturation diver; (2) The taxpayer would not fitness train for two to three hours per day if he did not need to do it for the purpose of working as a saturation diver.

There was no duality of purpose in the taxpayer’s expenditure on fitness training. He was therefore entitled to claim a deduction in respect of his fitness expenditure.

Practical point

Of course, gym fees will not generally be allowable expenditure for self-employed individuals, due to the ‘duality of purpose’ principle. However, Osborne is a useful reminder that every case is different. The existence of an incidental or unavoidable private benefit will not, as the tribunal judge indicated, “…necessarily preclude the exclusivity of the business purpose”.

The above article was first published in Business Tax Insider (April 2021) (