In March this year, HMRC announced a significant change to the VAT treatment of local authority leisure services. Prior to March 2023, local authorities managing leisure services in-house treated these services as business activities for VAT purposes . These services are now classified as non-business supplies meaning there is no VAT on income and all VAT on related expenditure can be reclaimed.

This change directly affects around 20% of leisure facilities which amounts to roughly £100,000 – £150,000 per centre per annum.