Under sail

My client Mr Tornado is the director and shareholder of a one-man limited company who in his spare time likes to sail Olympic-class racing catamarans. My client’s business has – in case it is relevant – nothing to do with sailing or water-related activities of any kind.

My client belongs to a sailing club and pays for this from his own earnings from his company which have been taxed at 40% plus National Insurance contributions – IR35 applies. Mr Tornado likes to tell me that state-of-the art sailing is not cheap: ‘it’s like standing under a freezing cold shower tearing up £50 notes’ he says.

While having a coffee-time ‘cruise’ through ITEPA 2003 my eye was caught by s 261 ‘exemption for recreational benefits’. If Mr Tornado’s company pays for his sailing...