How your climbing wall can save money by zero-rating children’s climbing shoe hire

An article about VAT might sound like a turn-off. But this one could genuinely save climbing walls money. The BMC's Nationally Elected Councillor for Indoor Climbers, Stuart Holmes, has done some investigating and here's what he has discovered.

It’s time to check your POS system and speak with your accountant about zero-rating children’s hire shoes for VAT purposes. Children’s climbing shoe hire can legitimately be treated as zero-rated for VAT, provided it’s structured correctly and meets HMRC’s conditions for children’s footwear.

Why this matters to your wall

If you run a busy wall with lots of family traffic and kids’ clubs, you might be handing over money to HMRC that you don’t actually owe. With children’s hire shoes typically priced at £2.50 to £3.50, that’s a saving of around 42 to 58 pence per customer, which can add up quickly to a bigger saving over the financial year.

The key VAT rule in plain English

HMRC’s notice 714 says that young children’s clothing and footwear is zero-rated where it is:

• Designed for young children
• Sized for them AND
• Held out for sale or hire as children’s items

HMRC’s own manual then clarifies that if the purchase of that footwear would be zero-rated, hiring or loaning the same footwear to the public can also be zero-rated.

HMRC even uses examples such as "hired children’s formal outfits, fancy dress and specialist footwear (for example bowling shoes and skates)" to illustrate the point that hire can follow the zero rating. In VAT terms, children’s climbing shoes are simply another form of specialist children’s footwear - if they meet the same design, size and “held out for” conditions, their hire qualifies too.

In HMRC language "held out for”** means how you present, describe, advertise or label an item to the public. It is about the way the product is marketed and represented, not just its physical characteristics.

What 'qualifying children’s climbing shoes' look like

To sit safely in the zero-rated box, your children’s hire shoes should:

• Be footwear in the normal sense (not made of excluded materials such as real fur)
• Be sized and designed so they are only suitable for young children (for example up to around age 13, with no adult sizes in that stock pool)
• Be clearly presented to customers as a children’s range – on signage, price boards, your website and booking system

Think about how you segregate them operationally. A good setup might be:

• Separate colour tags or racking for “kids’ hire shoes – up to size X only”
• A dedicated children’s size range in your stock list and till system called “Children’s climbing shoe hire (zero-rated)”
• Staff should be trained to maintain the separation

These details help show HMRC that you genuinely keep a children’s range that meets the young-child footwear rules, rather than just re-labelling smaller adult shoes.

Bundled pricing vs separate hire

Here is where many leisure operators lose the VAT benefit without realising it. HMRC’s guidance on sports and leisure explains that when you bundle admission and equipment hire into a single price, the whole thing becomes one supply and usually takes the VAT liability of the main service. That means, if your core admission is standard-rated, the 'free' hire shoes get dragged into 20% VAT as part of that package.

To preserve zero-rating on children’s shoes you need to:

• Charge admission and children’s shoe hire as clearly separate items, both online and at the desk.
• Consistently show the shoe hire has its own line on receipts and invoices, with VAT at 0%.
• This applies to memberships and prepaid bundles too

Practical steps for Wall Managers

Define your kids’ range

• Decide which sizes are “children only” and document that in an internal VAT note (for example up to size UK 5 in a junior-specific last).
• Ask suppliers for specs that show the shoes are intended for young users.

Tidy up your pricing and tills

• Add a specific product line for “Children’s climbing shoe hire” with VAT code set to zero-rated.
• Make sure price boards, website and booking flows show shoe hire separately from entry, with wording that makes clear it is for children under 14.
• Brief staff so they understand the distinction.

Keep evidence for HMRC

• File away supplier catalogues or screenshots showing kids’ shoe ranges and sizes.
• Keep a short written VAT policy explaining how you identify children’s shoe hire and why you treat it as zero-rated, pointing to HMRC Notice 714 and the clothing manual section on hire.
• Review compliance each year or when changing pricing

Handled this way, children’s climbing shoe hire becomes a small but meaningful win: lower visible prices for families, cleaner VAT recovery for your business, and a treatment that lines up with how HMRC already expects young children’s footwear hire to be taxed. If you're ever unsure, do check with your accountant before undertaking these changes.