It would appear that physiotherapy by HPC registered individuals are exempt from VAT.
I have a new client who is coming to see me with a view to forming a limited company.
I presume the exemption will not apply to corporate company ? Can corporates be HPC registered?
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Exempt
See Section 5.1 VAT Notice 701/57 that provided the services are provided by HPC registered employees then the supply is exempt.
See VAT 701/57 6.3
It may come down to who is responsible for providing the service to the patient, your client's company or a third party with whom your client's company contracts. In the latter case I believe the supply would be standard rated as a supply of staff.
Limited company
Thank you for the information. So if he forms a limited company who will be his client? Still the agency?
In which case
I'd say the supply by the limited company to the agency would be a standard rated supply of staff. VAT 701/57 6.3 states:
"When an employment business supplies registered health professionals (other than staff subject to the nursing agencies’ concession referred to in paragraph 6.5) as a principal to a third party, where the health professional is working under the
control and guidance of the third party, it is making a taxable supply of staff to that third party not an exempt supply of healthcare. It is the third party which is responsible for providing healthcare to the final patient, rather than the business
supplying the staff which has no such responsibility.
A taxable supply of staff is made even where the employment business is responsible for ensuring that the workers it provides are properly trained and qualified when they work under the control of the third party.
However, if the employment business maintains the direction and control of its health professional staff to make a supply of medical care directly to a final consumer, then the employment business is providing medical services rather than merely a supply of staff. In these circumstances, the business is making an exempt supply of healthservices (provided, of course, the services meet the conditions for exemption under section 2.3 above)."
The only reason I'm weighing in is because I have a psychiatrist on my books who does some NHS and some private work. We came to the conclusion that his NHS work would be standard rated and his private work exempt, because in the latter case he is supplying care directly to the consumer, whereas the NHS is responsible for his work under their auspices. It sounds as though you just have one extra link in the chain between HCP and healthcare provider.
Interesting thread - I have a similar issue with a physiotherapy client (Ltd) who subcontracts work he cannot complete himself. I think its exempt as he retains control of how the work is performed etc and bears the risk if errors. The contract is between the Ltd Co and the insurance co.