In this section:

  • Expenses and benefits A to Z

Sporting or recreational facilities

This guide explains your tax and National Insurance contributions (NICs) obligations if you provide sporting facilities for your employees to use.

On this page:

Facilities open to all employees, but not to the general public

Definitions or restrictions

You provide sporting or recreational facilities (or vouchers that are exchangeable for their use) that meet all of the following conditions:

  • The facilities are available for use by all of your employees.
  • The facilities aren’t available to the general public.
  • The facilities are used mainly by employees or former employees or members of employees’ families and households. (The facilities don’t have to be used mainly by your employees – this condition also covers use of the facilities by employees of other employers if you’ve grouped together with them to provide the facilities.)
  • None of the exceptions outlined below applies.

What to report, what to pay

You have:

  • no reporting requirements
  • no tax or NICs to pay.

Exceptions

The tax and NICs exemption doesn’t apply if you provide any of the following:

  • facilities based at premises used wholly or mainly as a private dwelling
  • holiday or other overnight accommodation (including any associated sporting facilities)
  • use of a mechanically propelled vehicle (including road vehicles, boats and aircraft)

For the tax/NICs rules that apply in these cases see the section ‘Other sporting facilities’.

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Other sporting facilities

Definitions or restrictions

You provide sporting or recreational facilities that don’t meet the conditions set out in the previous section.

What to report, what to pay

For employees earning at a rate of less than £8,500 per year, you have

  • no reporting requirements
  • no tax or NICs to pay

For company directors or employees earning at a rate of £8,500 or more per year:

  • report on form P11D - section K
  • pay Class 1A NICs on the value of the benefit

Work out the value to use

The value to report on an employee’s form P11D is the cost to you of providing the facilities for the employee in question (and members of their family or household if appropriate).

In most cases this will be straightforward. For example, if you provide access to a local gym for an employee the value to report is the amount you pay the gym.

For more complex arrangements you should seek advice from your HMRC office on how to calculate the value to report on your employee’s form P11D – for example, if you provide a recreational facility that’s shared by a number of employees and that doesn’t qualify for the exemption outlined in the first section of this guide.

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Where to report – understanding the £8,500 threshold

It’s important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information – including details of what’s included in the £8,500 threshold - follow the link below.

End-of-year forms at a glance

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Technical guidance

EIM21825: exemption for sports and recreation facilities

EIM21826: exclusion of mechanically propelled vehicles and domestic premises

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