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Charity Community

Landmark tax ruling: Supreme Court backs Nuffield Health

Author: Kristina Kopic, Head of Charity and Voluntary Sector, ICAEW

Published: 29 Jun 2023

Court upholds ruling that entitles Nuffield Health, a registered charity, to mandatory business rates relief of 80 percent for a members-only gym in the London Borough of Merton Council.

Court case

The case tested the entitlement of Nuffield Health, a registered charity, to mandatory business rate relief in respect of a specific gym branch primarily available to fee-paying members. The charity’s Merton Abbey gym provides facilities including a swimming pool, spa pool, sauna, a gym with ancillary rooms for exercise classes and consultations, and a car park and crèche that are available exclusively to the gym’s members. The appeal centred on the intersection between charity and rates law, and the judgement illustrates how the public benefit requirement in charity law is assessed when making decisions about rating relief.


The Supreme Court ruled that Nuffield Health, which operates hospitals, medical centres and fitness centres across the UK, was entitled to mandatory charitable relief in respect of the gym’s Merton Abbey branch. This branch was one of many fitness facilities operated by the health charity whose purposes include the promotion of health and healthcare and the prevention of ill health of any kind.

Public benefit requirement

According to Merton Council’s appeal, the membership fees charged by the charity’s Merton Abbey branch were too high to qualify as providing public benefit as they effectively excluded those of modest means. At the time when the proceedings were issued (April 2019), the standard membership fee was £71-80 per month, depending on the length of the subscription period.

However, Nuffield Health challenged this, and the Court decided that, under the Local Government Finance Act 1988 section 43(6), the public benefit test should not be decided based on the activities carried on in the Merton Abbey branch alone. Instead, the Court assessed whether Nuffield Health was using the Merton Abbey gym to pursue its charitable purposes, viewed in the context of its charitable activities as a whole. The judge found that the purposes of Nuffield Health as a whole are for the public benefit and that its health-related purposes are charitable. It also confirmed that the provision of benefits to the rich members of a section of the public may be as charitable as the provision of those benefits to the poor, except where the charity’s purposes are specifically concerned with the relief of poverty.

Thereby, Nuffield Health met the public benefit test, regardless of whether persons of modest means can afford to join the Merton Abbey gym.

Implications for the wider sector

The judgement illustrates how the public benefit requirement in charity law is assessed when making decisions about rating relief in general and provides clarity for charities operating across various premises.

The full judgement is available here: