Can I claim my golf membership against tax?

Golf memberships and benefits in kind

With the rise in popularity of golf memberships and the increasing range of corporate memberships on offer to local businesses from local golf clubs, you may be wondering what the tax implications are of a membership and if it’s possible to put your golf membership through your business? The reality is that to understand whether a golf membership is tax deductible is intrinsically linked to the type of membership it is, who is using it and why they are using it which dictates what potential liabilities and charges may be applicable.

Personal golf membership and tax liabilities

There is no way to put this type of membership through your business since it is not a business expense just a personal membership. The membership has been taken out by the individual, hopefully for the sheer enjoyment of playing golf or socialising or just access to the facilities of the club you have joined. Any business benefit is therefore deemed as incidental. If you did put that through a business, it would more than likely attract a bigger benefit in kind tax that any potential corporation tax saving.

Corporate Golf Club Membership and tax liabilities

Most golf clubs offer some form of corporate golf memberships. Many clubs are now building bespoke corporate memberships that don’t just include green fees and the ability to play. Annual corporate packages often now include access to meeting rooms and hospitality packages including lunches and special events. With personal golf membership fees at top UK courses costing many thousands of pounds annually this is a growing market with business owners looking to both play and do so in an efficient manner.

How you use or offer your corporate membership though will determine how it is viewed from a tax point of view.

Staff Benefit

Some companies purchase a corporate golf membership as a benefit for their staff. However, this must be available to all staff to use not just a directors perk although of course directors are staff too and can use it. This becomes a benefit in kind (BIK) for the employee and so is subject to the usual tax and national insurance deductions. It is then fully deductible for corporation tax purposes.

Client Entertaining

Taking clients for a round of golf is one of the oldest forms of client entertaining in business and the reason why clubs have evolved their own corporate membership packages to the changing needs of their corporate members. If your corporate membership is purely for client entertaining, then it needs to be in your accounts as such. This will reduce your profit on your profit and loss however it will be added back on when calculating corporation tax, so it won’t reduce your tax bill.

Depending on how you actually use your corporate membership could mean that its neither one of the other. So, if you do use the membership partially as a staff benefit and partially for client entertaining which is often the case then you need to allocate and split the cost. So the split for employee use will become allowable for corporation tax but a benefit in kind for the employees using it. The split used for entertaining clients can be disallowed for corporation tax.

If you want to read more from HMRC they have a page on expenses and benefits: club membership here, which covers what to report and pay if you pay fees for an employee, if the employee arranges membership but you pay the fees and if your employee pays the fees but you reimburse them.

If you would like to learn more about our tax services and how we can help you why not visit our tax services section here.