Ensure you don’t fall into VAT trap

Value Added Tax (VAT) is a complicated levy and outside of the private medical profession is a normal tax for businesses to deal with. Healthcare has special provisions within the VAT legislation, but it is important to note that for medical services to be exempt from the tax, you must keep certain records. Otherwise tax officials may argue that the work is subject to VAT – or ‘standard rated’ as they call it.

Ian Tongue looks at the background and provides practical guidance to help support your status.

Why is VAT an issue for medics?

Up to May 2007, VAT was not on the radar for most medics in the context of the work they perform.

However, a case involving a doctor changed that and brought in a requirement to look at the work performed to see whether its principal purpose was the provision of medical care. Where the principal purpose is not medical care, then the work is potentially subject to VAT.