BMA Guidance: VAT on Medical Services
How do you decide whether or not VAT is applicable?
Where the principal purpose of the medical service is the protection, maintenance or restoration of the health of an individual then the services will be exempt from VAT.
Primary heath care provided through either the NHS or the private sector will be exempt from VAT.
However, if the purpose of a medical examination or report is to enable a third party organisation (e.g. insurance companies) to decide a course of action the medical services are subject to VAT (at the standard rate).
Medical practitioners whose income (subject to VAT) exceeds the VAT threshold (currently £67,000) must register with HM Revenue & Customs.
Medical practitioners who are already VAT registered (e.g. as a result of dispensing changes which took effect on 1 April 2006) must ensure that they account for VAT on any affected services from 1 May 2007.
For further information on VAT please refer to the HMRC’s VAT website, in particular HMRC Reference:Notice 701/57 (January 2007)
For further advice on VAT medical indemnity and debt recovery: http://www.bma.org.uk/support-at-work/pay-fees-allowances/fees/organising-your-finances/vat-medical-indemnity