If we want people to work out, why are we charging them tax on it?
The head of Pure Gym, Humphrey Cobbold, said on Radio 5 yesterday that the thing stopping people going to the gym isn’t laziness (cheers Humphrey) - it’s price.
What it means: If we’re supposedly in an ‘obesity crisis’, surely the government should be trying to incentivise people to get a workout in, he says. According to Cobbold, a 20% price discount on standard gym prices could do the trick.
VAT (or ‘value-added-tax’) was created by the EU to standardise tax on consumption of goods and services, It’s charged on gym memberships at the standard rate of 20%. The Treasury, who run the government’s finances, say they can’t change that at the moment because of EU laws.
But sports services are actually exempt from VAT, if they’re run by a non-profit. Cobbold’s arguing that’s not right: if we want to encourage sport, we should give people accessing exercise facilities through private services the same perks as those accessing them through public services, particularly as there just aren't enough sports-focused non-profits to cater to everyone.