Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Fit for VAT

16 June 2015
Issue: 4505 / Categories: Forum & Feedback , VAT

Calculating the VAT chargeable on a subscription paid by instalments

My limited company client is registered for VAT and operates a fitness studio where individuals can either pay a subscription to join as a member or pay a daily fee of £5 to use the facilities.

In the case of the membership arrangement an individual can either pay an annual subscription of £99 in advance of joining or £10 a month by standing order.

My question is whether in the case of the monthly arrangement we can treat the extra £21 that is payable compared with the advance fee (£10 x 12 months less £99) as a VAT-exempt interest/finance charge thereby avoiding output tax on this amount.

We consider that this exemption would not affect the company’s input tax because of the partial exemption de minimis limits. We could formulate documentation (if necessary) to indicate that the £21 charge to the member relates to a finance...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon