Esporta Ltd v HMRC: VAT on membership fees

Andrew Legg

On 28 September 2011 the First-tier Tribunal released its decision in Esporta Ltd v HMRC [2011] UKFTT 633 (TC).

The Tribunal found that Esporta supplied its gym users with access to its facilities and did not supply them with services of having sufficient facilities in existence.

As a result sums recovered by Esporta from members who failed to pay their monthly fees and whose access to the gym was thereby automatically barred were held to be VAT-free damages for breach of contract notwithstanding that Esporta did not formally cancel the defaulting members’ contracts but instead tried to encourage them to return to the gym.

The decision in Esporta provides helpful guidance in two areas:

first as to what taxable supplies are made in...

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On 28 September 2011 the First-tier Tribunal released its decision in Esporta Ltd v HMRC [2011] UKFTT 633 (TC).

The Tribunal found that Esporta supplied its gym users with access to its facilities and did not supply them with services of having sufficient facilities in existence.

The decision in Esporta provides helpful guidance in two areas: