VAT – When Does It Affect General Practice?

You will find that most GP practices need not worry about VAT, as almost all of the services a GP practice provides are VAT free. However, not all services that you can offer at your GP practice are exempt from VAT, so it pays to be careful and get a good understanding about what you can and cannot do.

To give you a clear understanding of the difference between an exempt from VAT service and services that incur VAT, we have separated the two…

VAT exempt services

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 that include VAT

Some services are not exempt, and are subject to VAT. Those services are where the principal purpose of the service provided, is the provision of information to a third party enabling the party to make a decision.

To give you more clarity on this here are a list of services that will incur VAT responsibility…

  • 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 practice will or already does carry out any of these services that incur VAT, it is important to keep track of your earnings through those. The total limitation right now is £82,000 and if you exceed that you will need to set aside an amount of income to be taken as VAT.

If you are not sure if you are exempt from VAT, or you need somebody to take care of your VAT responisibilities, Accounts Unlocked For Doctors are here to help.

We can oversee and calculate what you are predicted to earn over or under the limitations and work with you accordingly to give you peace of mind and unrivalled organisation of your tax and VAT affairs.