24/09/07 - VAT Ruling Shows Lack of Joined Up Government

Government Blasted for Yet Another Example of Failing to Act in Joined Up Way

Cllr Caroline Nokes, the Executive Member for Leisure at Test Valley Borough Council, has warned that a recent court ruling on VAT could have a huge impact on local fitness centres.A test case in Scotland decided that gym club memberships which provided access to facilities such as steam rooms, saunas and jacuzzis, were liable for VAT, which could lead to a price hike of 17.5% on all facilities that are operated by charitable trusts. 

Until now these trusts have been exempt from VAT, but HM Revenue and Customs has been determined to change that status. Not only could there be a significant increase in charges, but there is also an attempt by the revenue to retrieve up to three years of back payments.

Caroline said:

"This is yet another example of the Government failing to think in a joined up way.  Many local authorities have used leisure trusts in order to provide fitness facilities as cheaply as possible to the local community.  Whilst we are constantly reminded by the Government that we have to eat more healthily and be more active, the Government is then slapping a tax on people who are choosing to do exactly that.  We should be looking for  incentives to encourage people to use these facilities, not trying tax them for it."

"Both Romsey Rapids and Andover Leisure Centre could be affected by these changes, and Valley Leisure Limited are working with the Sports and Recreation Trusts Association (SPORTA) to engage specialist advice to tackle this issue."