VAT Exempt Essential Medical Services
My new client is a Chiropractor and therefore provides predominantly VAT Exempt Medical Services. I was surprised that his previous accountant has not advised that he voluntarily register for VAT in order to reclaim his input VAT. Are such medical services companies specifically disallowed from voluntarily registering in order to do this?
It just seemed like fairly obvious advice and I wanted to check there wasn't a valid reason their previous accountant did not suggest it (indeed if they did not suggest it).
Many Thanks
Sir Digby
Input VAT on exempt supplies
You can't reclaim input VAT in relation to exempt supplies.
If some supplies are VATable, then he would be able to reclaim a proportion of the input VAT on overheads and all the input VAT on supplies directly related to the VATable supply.
You would need to crunch the numbers to work out whether it was beneficial to register.