Most membership subscriptions are standard rated, because the club or association is supplying the benefits of membership in return. Subscriptions to non profit making trade unions, professional associations, learned societies, representational trade associations and certain public interest bodies are exempt under Group 9 of Schedule 9 to the VAT Act 1994, and playing membership of a non profit sports club can be exempt under Group 10. Where a subscription buys a mix of benefits, it may have to be apportioned.

Is a membership subscription a payment for a supply?

Usually, yes. HMRC’s Notice 701/5 lists providing benefits to members in return for subscriptions as a business activity. The VAT liability of the subscription follows the liability of the benefits supplied. Most clubs supply a package, but HMRC stresses that a package does not automatically mean several supplies: there is often one principal reason for joining, with newsletters or a handbook simply incidental to it. In that case the subscription is consideration for a single supply taking the liability of the main benefit. Whether a body’s activities count as business at all is covered in what counts as business activity for VAT.

The exception is a subscription that is entirely voluntary and secures nothing or only nominal benefits, such as a badge, sticker or name in a programme. That is a donation and outside the scope of VAT. A subscription can only be partly treated as a donation if the substantive benefits are available to non members free or more cheaply, or the club can show members pay more than they would normally pay for similar goods or services.

Which bodies can treat subscriptions as exempt?

Group 9 exempts subscriptions to non profit making bodies that operate in the public interest. Notice 701/5 sets out the categories and the tests HMRC applies:

  • Trade unions: bodies whose main objective is negotiating pay or conditions of service for members.
  • Professional associations: bodies restricting membership wholly or mainly to people who hold or are seeking a recognised qualification from them, where membership is obligatory or customary for the profession. HMRC treats “wholly or mainly” as met at 75% or more.
  • Learned societies: bodies whose primary purpose is advancing a particular branch of knowledge or fostering professional expertise, with membership wholly or mainly (75%) connected by employment to those aims.
  • Representational trade associations: bodies whose primary purpose is making representations to the UK government on legislation or other public issues affecting members’ business or professional interests.
  • Public interest bodies: bodies with aims of a political, religious, patriotic, philosophical, philanthropic or civic nature directed beyond their own members.
  • Umbrella organisations made up of qualifying bodies, where their objects fall under the same heading.

Non profit making is judged by the body’s objects rather than whether it makes surpluses. A constitution that bars distributing surpluses to members or others, other than on winding up, is normally accepted. There is no legal definition of a profession; HMRC looks at factors such as required qualifications, a code of conduct and a broad base of knowledge.

What is excluded from the exemption?

Even for a qualifying body, these supplies to members are not exempt and are standard rated unless another relief applies:

  • supplies not referable to the body’s aims as set out in its constitution or rules
  • the right of admission to premises, events or performances for which non members have to pay
  • anything provided only for an additional payment beyond the subscription
  • all supplies to non members

Admission is the trap. If members get free entry to an event that non members pay for, or an event is subsidised by subscriptions, part of the subscription is standard rated. If the event is self financing, or members and non members pay the same, it is not. Free hospitality is standard rated unless directly connected with the body’s aims, such as at an annual conference.

Registration fees that members must pay to a statutory body by law in order to practise are normally outside the scope of VAT. Non statutory registration charged as a separate fee is standard rated.

How are sports club subscriptions treated?

Group 10 exempts sporting services supplied to individuals by an eligible body. Notice 701/45 says a subscription is exempt if the benefits of membership meet the conditions, which include that the club is non profit making, has a non distribution clause, uses its surpluses to maintain or improve facilities, and is not subject to commercial influence. Payments for social and non playing membership are standard rated. Joining fees are exempt where they buy the same benefits as an exempt subscription, and life membership is exempt if it entitles the member to playing services for life and the annual subscription is exempt.

When must a subscription be apportioned?

If the subscription buys distinct and independent benefits with different VAT liabilities, it is a multiple supply and must be apportioned. HMRC gives priority booking rights, guaranteed seats, discounts on admission and items with a resale value as examples, and says they are substantive whatever they cost the club.

Non profit making bodies have an extra option. Under an extra statutory concession they may apportion a single supply as if it were a multiple supply, for example to zero rate the value of a printed yearbook. The concession is optional, cannot be used retrospectively, and if used must be applied to all types and elements of subscription; a body cannot pick and choose. It does not work the other way: multiple supplies cannot be treated as single. There is no fixed method, but HMRC usually accepts apportionment by the relative cost of providing each benefit, based on the previous year’s accounts and applied consistently.

How do joining fees, life membership and waiting lists work?

  • Joining fees of a general nature follow the subscription and its apportionment; a fee for a particular facility takes that facility’s liability.
  • Life membership follows the annual subscription unless life members get extra benefits.
  • Waiting list fees are exempt only if deducted from the first subscription (which itself qualifies for exemption) and refundable if the candidate does not join; otherwise they are standard rated.
  • Instalments costing more than a single payment take the subscription’s liability, whereas a separate charge for deferring payment is an exempt grant of credit.

What does exemption mean for registration and VAT recovery?

Exempt subscriptions do not count toward the £90,000 VAT registration threshold, whereas standard rated and zero rated subscriptions do. A body with exempt income generally cannot recover all the VAT on its costs; see VAT partial exemption. Because zero rated supplies are taxable, apportioning part of a subscription to zero rated printed matter can increase recovery. The difference between the two outcomes is explained in zero rated vs exempt supplies.

Can you show how this works in practice?

Illustration only. A VAT registered, non profit making tennis club that is an eligible body charges £300 for playing membership and £120 for social membership. The playing subscription is exempt. The social subscription is standard rated, so at 20% it contains £20 of VAT. The club also runs an annual dinner: tickets are £40 for members and non members alike, so no part of the subscription is treated as admission. A professional body charging its members £250, with a yearbook included and no other benefits, would treat the whole subscription as exempt unless it chose to apply the concession and zero rate the yearbook element across all subscriptions.

What are the common mistakes?

  • Assuming any non profit body is exempt. A social or hobby club that is not a trade union, professional, learned, representational or public interest body charges standard rated subscriptions.
  • Missing subsidised events. Free or subsidised member admission to paid events makes part of the subscription standard rated.
  • Selective apportionment. Using the concession for some subscriptions but not others is not allowed.
  • Confusing VAT with tax relief. Whether a member can deduct a professional subscription for income tax is a separate question; see professional subscriptions and List 3.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.