OPERATOR PERSPECTIVE
Especially in organisations with big GP referral programmes supported by highly skilled workforces, my advice is that we shouldn’t be scared by the complexity of GLP-1s. With some specialist training in GLP-1s, we absolutely have the personnel we need to deliver the advice people seek – especially those buying their GLP-1 supply online.
We pass much of this benefit on to our local authority partners, delivering services to them at a reduced price. The result is that most procurement is now on an agency basis. And with many local authorities under real financial pressure – and looking to get as much value as possible from their suppliers – we’re seeing more contracts than ever going out to tender. We would normally bid on around 15 a year, but we bid on over 20 last financial year and it will be over 20 again this year. There’s a flood of new business opportunity. However, there’s also a major new challenge in the shape of the government’s changes to National Insurance (NI) contributions, which came into force on 1 April 2025. In industries such as ours, with a high proportion of part- time workers on lower salaries, this will have a massive impact. At Everyone Active, we’ll have to find another £12m this financial year just to cover the additional NI. This is effectively a tax on jobs and an absolute hammer blow – one we will need to manage by reviewing the number of people we employ / recruit and through the prices we charge our members. The move to an agency model softens the blow slightly, but still – I can think of no worse way to try and grow the economy.
Through the agency model, we can increase our profitability by 3–4 per cent. That’s a lot in a sector where margins are small.
What else is happening in the sector? One of the biggest changes in the local authority market right now – since late 2024 – is the move towards an agency model. In March 2023, HMRC changed its guidance to local authorities, confirming that most supplies of leisure services by a local authority can now be treated as ‘non- business’. When a local authority sells a leisure service – a gym membership, for example – it no longer has to charge VAT on that sale. The local authority is also able to recover the VAT it incurs on providing that service. This decision rendered the provision of leisure services by local authorities more VAT-efficient than provision of that same service by organisations such as Everyone Active, because we aren’t able to treat leisure sales as non-business. What we – and other similar organisations – have therefore done is develop an agency model. Instead of being a council’s contractor, we become its agent for the delivery of leisure services; in its leisure memorandum of understanding, HMRC has already accepted that leisure services can be provided as an agent. Through this model, we benefit from the same non- business VAT efficiencies as local authorities. It does not apply to F&B or retail, but we can deliver fitness on an agency basis and it increases our profitability by 3–4 per cent. That’s a lot in a sector where margins are small.
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STATE OF THE UK FITNESS INDUSTRY REPORT 2025
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