After overhearing a group of lads discussing whether or not they could put their golf membership through their business (while I was sunning myself with a book at my son’s golf lesson the weekend) I thought this would make a great video and blog – so here it is!!
Personal Golf Membership
Let’s start with a personal membership – as this is most likely what golfers will have with their club of choice. And this is a quick answer too – it’s a no I’m afraid. You cannot argue that it is a legitimate business expense (as it’s a personal membership – clue is in the title!), and therefore putting it through your business would attract a bigger benefit in kind tax that any corporation tax saving.
Corporate Membership
As before – it’s in the title! This membership can go through your business – however this doesn’t necessarily mean it will save you corporation tax. How you use the membership will determine how or if it saves you any tax. There are commonly 3 ways you can use the membership, which we explore below:
- A Benefit For Staff – with this option the membership will be used for your employees to enjoy being a member of your chosen club. This includes use by directors too. This needs to be available for all employees and it will be a benefit in kind (BIK) for the employee, and attract the usual tax/NI deductions for them. This is then fully deductible for corporation tax purposes.
- For Entertaining Clients – if you are looking to use the membership as a way to entertain clients, have client meetings etc then this will go in the accounts as client entertaining. It will reduce your profit on your profit and loss. But, will be added back on when calculating corporation tax, so it won’t reduce your tax bill.
- A Bit of Both – or you can mix and match both of the above. If this is the case then the cost of the membership will be need to be split between the use for employees (this portion will then become allowable for corporation tax – but as above will be a BIK for your employees), and the use for entertaining clients (which as above this portion will then be added back on and disallowed for corporation tax).
So there you have it – as usual with most of these questions, the answer is ‘it depends’ – but hopefully you have a better understanding now of how it all works. I guess all that’s left for me to say is – can I come play with you?!
If you’d like to speak to an accountant who will help you spend more time on the golf course and less time on your books then pop over to our Work With Us page, complete the quick questionnaire and book your discovery call. I look forward to playing golf with you!
