VAT for private clinics: what is exempt, and what is not
Medical care by registered health professionals is exempt from VAT. Cosmetic treatments, products and some services are not. Where the line falls, and why it matters for registration.
VAT exempts medical care provided or directly supervised by health professionals on a statutory register, such as doctors, dentists, nurses and registered allied health professionals. The test is not only who provides the service, but what it is for: its primary purpose must be the protection, maintenance or restoration of the patient’s health.
Where the line usually falls
- Consultations, diagnosis and treatment
- Health-related reports, such as sick notes
- Care supervised by a registered professional
- Treatment of a medical condition
- Primarily cosmetic treatments
- Products sold to patients over the counter
- Therapists without a statutory register
- Reports for purposes other than health
Why it matters
A clinic with mainly exempt income may still make taxable sales: aesthetics, retail products, room hire. If those taxable sales pass £90,000 over a rolling 12 months, the clinic must register for VAT, and then needs to work out how much VAT on its costs it can recover, since VAT on costs linked to exempt services usually cannot be reclaimed.
- Record exempt and taxable income separately from the start.
- Check the purpose of each treatment, and keep the clinical rationale.
- Watch rolling 12-month taxable sales every month.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.