Income Tax (Earnings and Pensions) Act 2003 section 261

Exemption of recreational benefits

Section 261 provides an income tax exemption for sporting or recreational facilities made available by employers to their employees, provided certain conditions about availability and usage are met.

• Sporting or recreational facilities provided by an employer are exempt from income tax if they are available generally to employees, not open to the general public, and used mainly by people with an employment-related right to use them
• Where two or more employers share facilities, each employer is assessed separately — if one employer restricts access to only some of its employees, none of that employer's staff can claim the exemption, but other employers' employees may still qualify
• Allowing limited outside use — such as a local school using a company swimming pool — does not disqualify the exemption, provided the facilities are still used mainly by those with employment-related access
• The exemption extends to former employees and their families, and also covers non-cash vouchers that can only be used to access the qualifying facilities

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