VAT for Cognitive Behavioural Therapist

VAT for Cognitive Behavioural Therapist

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I have a Contractor with a Limited Company working through an agency to provide Therapy sessions to people with Behavioural problems that are referred by the NHS.

The Agency doesn't want him to register for VAT, as they can't Invoice the NHS for VAT, but my understanding of VAT exemptions for medical professionals is that it only applies to those who work under a formal governing body, whereas I'm not too sure that a CBT does...

The Contractor doesn't earn enough to trigger the VAT threshold, however he wants to for the Flat Rate Scheme.

Any ideas?

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chips_at_mattersey
By Les Howard
26th Aug 2015 09:59

Medical professional? - more questions than answers!

Are ths person's services covered by the exemption? See the list in PN 701/57, para 2.1. To be included he must be listed on an appropriate medical professional register.

Further, is he supplying staff or services? This is a fine line, and will depend on the contractual position, as well as the actual day-to-day practice.

The FRS will only work if the services are taxable. If they are exempt, he cannot register in any case.

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By seanis0000
26th Aug 2015 10:12

Thanks for your reply.

I would need to check his agency contract, but it is most likely to provide staff (for IR35 purposes).

Based on what he has told me, I don't think his services are covered by the para 2.1 exemption list, I think he is more likely to fall under para 2.2 as a therapist without a statutory register. He doesn't fall under the Health Professional Order 2001, although I will double check this with him.

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By emcnicholas
27th Aug 2015 15:40

Medical Care - By Regulated Professional or in Hospital Clinic
To be exempt cognitive behaviour therapy would need to be provided either by a registered health professional or in a hospital or clinic. In this case it is worth checking under VATA sch.9 grp.7 para1(c) and the register in the 2001 Order, for which see the Health & Care Professions Council and the professions they regulate. Also medical care is exempt when provided in a hospital, clinic or other regulated institution, so that is worth checking too. But, as ever, so much turns on the facts.

Eamon Mc Nicholas

Tax Barrister

www.EamonMcNicholas.com

[Liability is excluded. The above is not to be taken nor used as specific advice.]

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