Vol. 430 No. 5
97 Mr. Yates asked the Minister for Finance if he will clarify the situation relating to any change in the classification of health and fitness clubs as private enterprise under the VAT code; and if he will reconsider the effects of this on such centres.
Commercially operated health and fitness clubs are liable to VAT at the 12.5 per cent rate because they provide taxable services in the course or furtherance of business. The services in question relate to the care of the human body and leisure-orientated activities generally. Prior to 1 July 1992, many of the services of these clubs, such as use of sauna, jacuzzi, swimming pool etc. were exempt from VAT on the basis that these were lettings of immovable goods. This position, which affected a wide range of sports facilities, gave rise to a number of undesirable anomalies. I moved to correct these in last year's Finance Act, when I made all commercially run sports and leisure facilities liable to VAT, as EC law requires.
Recently, certain health and fitness interests made representations to me about the fact that similar facilities run by non-profit making organisations are not liable to VAT. This is because such facilities are not deemed to be operating in the course or furtherance of business. I am keeping this matter under review, in particular with a view to ensuring that undue distortions of competition do not arise.
