VAT – When Does It Affect General Practice?

Many medical practices will not need to consider VAT as the majority of services provided by a GP are exempt from VAT.  However, not all services are exempt and GP principals should periodically review the level of these services.

Services Exempt from VAT

 Services are exempt from VAT where those services are principally aimed at the protection, maintenance or restoration of the health of a patient.  These are the principal services offered by a GP practice.

Services Subject to VAT

 Services which are subject to VAT are those where the principal purpose of the service is the provision of information to a third party to enable that party to take a decision.  Some of the services which are subject to VAT are the following:

  • Certificates/reports. A certificate or report may be subject to VAT or exempt.  The dividing line is often difficult to pin down.  Reports enabling claims to compensation, benefits or registration as a blind person are all subject to VAT.
  • Dispensing of drugs for dispensing practices.
  • Fitness certificates as part of an individual taking up a particular professional or sporting activity.
  • Cosmetic services undertaken purely for cosmetic reasons.
  • A forensic statement or report.
  • DVLA medicals.
  • Medico-legal work such as medicals, reports and expert witness testimony for the judicial system.
  • Pre-employment medicals.

If your GP medical practice is carrying out any of the above services or any other services that do not qualify as exempt from VAT and the total value of the services exceeds the current limit of £82,000, the practice will need to register for VAT.

How We Can Help

We help our GP clients by reviewing their income regularly and advising on any VAT liability.