Do I charge VAT on sports coaching and personal training?

Start with who is asking: the two exemptions that get confused

"Is my coaching exempt?" feels like it should have a straight answer, and the reason it does not is that two separate exemptions are hiding behind the same question. One is the private tuition exemption, which is about teaching and belongs to individual teachers. The other is the sport exemption, which is about sport and belongs to non-profit clubs. They have different conditions, they cover different things, and a great deal of commercial coaching qualifies for neither and is simply standard-rated.

So before you can answer the VAT question, you have to work out which door, if any, you are standing in front of. The next three sections take them one at a time: the individual coach, the non-profit club, and the large group in the middle, commercial fitness, that usually gets neither.

Route one: private tuition, for the individual coach

The first door is the private tuition exemption in Item 2 of Group 6 of Schedule 9 to the VAT Act 1994. It exempts private tuition in a subject ordinarily taught in a school or university, given by an individual teacher acting independently. For a coach, three things have to line up. The sport has to be one ordinarily taught in schools, tennis, football, swimming and athletics sit comfortably there, and HMRC has accepted tennis where a coach evidenced it on school curriculums; more niche or purely recreational activities are far more arguable. You have to be teaching it as an individual on your own account, as a sole trader or a partner, which includes members of an LLP. And you have to be giving the coaching yourself.

The "ordinarily taught" test is where most of the genuine uncertainty sits. The mainstream sports on the PE curriculum are safe, but the further you move towards the specialised or the fashionable, the more arguable it becomes, and this exact boundary is litigated regularly: yoga, pilates and various dance and martial-arts styles have all been fought over, precisely because whether each is a subject ordinarily taught in a school or university is a question of evidence, not of obviousness. If you coach anything outside the core curriculum, it is worth pinning it down before you treat it as exempt, because a wrong call sits as unbilled VAT until HMRC asks.

Two traps sit inside that. A limited company cannot use this exemption at all: the company, not an individual, is making the supply, so coaching run through a company is standard-rated at 20% even if you are the only director taking the sessions. And the exemption only reaches coaching you deliver personally. In Marcus Webb Golf Professional v HMRC [2012] UKUT 378 (TCC), the Upper Tribunal held that lessons given by a coach engaged by the business were taxable because he supplied them on the business's behalf, not on his own account. So sessions your assistant or employed coaches deliver are standard-rated, even while your own identical sessions are exempt.

Route two: the sport exemption, for non-profit clubs

The second door is a different exemption altogether, in Group 10 of Schedule 9. It exempts sporting services, playing, competing, coaching and the use of facilities, but only when they are supplied by an eligible body to the people taking part. "Eligible body" is the whole game here, and it is narrow: the body has to be genuinely non-profit-making, barred by its constitution from distributing profits, applying any surplus to maintaining or improving its sporting facilities, and not run for commercial gain or as part of a wider commercial business. A members' sports club or a community amateur sports club is the classic example.

Two things follow. A commercial gym, a leisure company or a self-employed coach is not an eligible body, so this exemption is not open to them at all, however much sport they provide. And even for a genuine club, the exemption covers the sport, not everything the club sells: the bar, the café, the function-room hire and the sponsorship follow normal VAT rules. Most clubs that use this exemption end up partly exempt, with a mix of exempt sport income and taxable other income to apportion.

Where personal training and commercial gyms land: standard-rated

That leaves the largest group of all: commercial fitness. A self-employed personal trainer, a bootcamp, a commercial gym or a studio is, in most cases, standing in front of neither door. Personal training and general fitness instruction are not treated as a subject ordinarily taught in a school or university in the way an academic or sporting subject is, so the private tuition route is usually closed, and a commercial business is not an eligible body, so the sport route is closed too. The result is the ordinary one: your services are standard-rated, and you charge 20% once your taxable turnover passes the £90,000 registration threshold.

The phrase that causes trouble here is "exercise and fitness is exempt". It is a half-truth. Exercise and fitness supplied by a non-profit eligible body can be exempt under the sport rules; the same activity supplied by a commercial trainer or gym is not. The exemption is a feature of the body providing it, not of the activity itself, which is exactly the distinction that catches people out.

Exempt is not free, and the threshold decides registration

Two consequences tie the routes together. First, exempt is not the same as zero-rated. On exempt coaching you charge no VAT, but you also cannot recover the VAT on the costs behind it, from court hire to equipment, so the exemption protects your prices while quietly taxing your overheads. Run exempt coaching alongside standard-rated income and you are partly exempt, with the VAT on shared costs to apportion.

Second, the threshold only counts one side. Your exempt coaching does not count towards the £90,000 registration threshold, but your standard-rated income, the company sessions, the employed coaches' sessions, the personal training, the online courses and the merchandise, does, and can take you over on its own. Getting the exempt-versus-taxable split right is therefore not just about the VAT on each session; it is what tells you whether, and when, you have to register at all.

When you might need expert VAT advisory

Coaching is one of those areas where the headline looks simple and the value is entirely in which door you are standing in front of. In practice, the situations below are where a senior specialist's read meaningfully improves the outcome:

• You coach a sport as a sole trader and want to know whether it counts as ordinarily taught, and whether your setup keeps you exempt
• You are considering a limited company and need to weigh the exemption you would lose against the reasons to incorporate
• You employ or work with other coaches and need each person's sessions placed on the right side of the line
• You run a club and want to confirm it genuinely meets the non-profit eligible-body conditions
• You mix exempt coaching with standard-rated personal training, online courses or merchandise and want a partial exemption method that recovers what it fairly can
• You are an accountant with a coach, club or fitness business on your books and want the treatment sense-checked before the next return

Whether you're a coach weighing up your structure or an accountant with a club or fitness business on your books, we focus on the VAT questions where extra expertise pays off, and we work in plain English.