Your Guide to Tax as a Personal Trainer

So first of all, let’s have a look at your options once you are fully qualified. You can either be ‘Employed’ or ‘Self-employed’ or a ‘Limited company’.

We don’t cover being a Limited Company or Corporation Tax in this guide. So, head over to our ‘Guide to tax as a Limited Company’ post if you have decided to incorporate.

EMPLOYED

This is the simplest of routes. You get in contact with a gym and they offer you a contract as an employee in their gym.

You work the hours agreed and get paid a set wage for the work you do. You are entitled to paid holidays and sick pay but you are usually limited to what you can earn.

You are paid in line with the payroll period of the company you choose to work for and they deduct tax and national insurance at source through Pay As You Earn (PAYE).

SELF-EMPLOYED (SOLE TRADER)

This route is completely different and holds so many more responsibilities both within the Fitness Industry but also by law. You are in control of your own fate.

Talking about control, you have to plan your own time and the direction you wish to move in.

You’re officially on your own to build your own working life. Most Personal Trainers will join a gym on their ‘PT package’ and pay rent. By doing this you have to build your own client base and get paid through them.

The opposite to being employed; you have to keep records of both your income and expenses, push your own marketing to grow your business and potentially work more than you originally plan to.

From this income, you have to calculate your own Tax and National Insurance by submitting a Self-Assessment Tax Return (SA100). You must register and submit your first Tax Return by 31 January following the end of the tax year you start your Personal Training business.

REGISTERING FOR SELF-ASSESSMENT

You must register for Self-Assessment once your income exceeds £1,000 during a tax year. At this point you have exceeded the Trading Allowance. Even if you aren’t making much money, once you have surpassed that £1,000 you must register.

This is the first step in letting HMRC know you have started your own business and all Self-employed individuals must do this process. You can use the link above to follow HMRC’s process of requesting your details to register you for Self-Assessment and your own Unique Taxpayer Reference (UTR).

Everyday Accountants have covered this in a separate blog, which you can access here.

In short, you need lots of information about you and your business. Once you have submitted the application, your UTR takes 10 working days to come by post and an activation code will be sent out separately to activate your GOV ID account fully.

COMPLETING YOUR SELF-ASSESSMENT TAX RETURN

Now you have received your Unique Taxpayer Reference (UTR), you are ready to complete your Tax Return. If submitting electronically, you have until 31 January following the end of the tax year to submit your Tax Return. Any tax due will also be due by this date.

In your first year, you must report your income* and expenditure** from your start date to 5 April. Check out our other post ‘Your first year as a self-employed individual’ for more detailed information on your first year’s reporting requirements and how it works.

We suggest you align your accounting year end with the tax year, you can have a different accounting period year end but this usually complicates matters.

Now back to the references from above:

* Income is money you receive in exchange for you providing your personal training services or goods. Whether you have received cash or bank transfers, it all counts.

** Expenses, on the other hand, is money spent in your business in your effort to generate revenue (income). We will go through a list of allowable expenses later on in this guide.

To calculate your profits, in short, you need to take your income and deduct your expenses. Your profit is then used to calculate your tax and national insurance.

ALLOWABLE EXPENSES AS A PERSONAL TRAINER

So you are probably reading this guide and starting to make sense of the process, but we know this is what you really want to know… What can I claim for? Well, here is a comprehensive list:

Cost of goods bought for resale or goods used

  • Branded gym wear for resale
  • Branded accessories for resale
  • Supplements for client use
  • Gym membership

Car, van and travel expenses

  • Mileage allowance OR Actual car expenses
  • Parking
  • Hotels
  • Train, taxis or flights

Wages, salaries and other staff costs

  • Wages and salaries if you employ someone
  • Contractor costs

Rent, rates, power and insurance costs

  • Professional indemnity insurance
  • Gym sign on fee
  • Gym rent
  • Use of home as office

Repairs and maintenance of property and equipment

  • Repairs of existing equipment
  • Maintenance

Accountancy, legal and other professional fees

  • Accountancy fees
  • Legal fees

Interest and bank and credit card financial charges

  • Bank charges on business bank account

Phone, fax, stationery and other office costs

  • Mobile phone
  • Postage
  • Stationery – printer ink, paper

Other allowable business expenses

  • Business logo/branding
  • Marketing
  • Web hosting
  • Website costs
  • Software and app subscriptions
  • Training and courses (updating existing knowledge)
  • Own branded clothing
  • Business cards
  • Protective clothing or accessories

KEEPING TAX RECORDS

As a self-employed Personal Trainer, you’re legally required to keep your records for SIX YEARS. Records in this instance mean invoices, bank statements and receipts. These can be physical copies or electronic copies.

We do suggest keeping electronic copies, as Making Tax Digital (MTD) for Income Tax comes into play from April 2023 and then digital record keeping will be compulsory.

We recommend keeping your records separate from your personal lifestyle. The simplest way to do this is:

  • Open a business bank account
  • Store your records using a secure cloud platform
  • Set aside time on a regular basis to ensure you are up to date
  • Keep a spreadsheet to summarise everything

VALUE ADDED TAX (VAT as you probably know it)

At Create PT we have been working with Everyday Accountants to develop a course teaching fitness professionals how to set up and run their accounts. It will soon be incorporated into our Level 3 Personal Trainer course and will be available separately as a CPD. Alternatively if you’d like to get the experts to do the hard work for you, please visit their page HERE to see the options and find loads more helpful advice.

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