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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4984
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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if a doctor provides medical services through limited company

Resolved Question:

if a doctor provides medical services through limited company are they liable for VAT
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Your customers would only liable to VAT if
- your company's turnover is above threshold for VAT (currently £79k)
- your company is VAT registered

More information on this can be found here

http://www.hmrc.gov.uk/vat/start/introduction.htm

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.

Hello and thank you for replying.


It seems to me that maybe I was not clear enough. I do not need a general advice on VAT. I am already aware of the threshold for VAT and the list with the exempt businesses. My question is specific - is a doctor who provides medical services through limited company liable for VAT. From the list on HMRC it doesn't become clear to me whether such entity would be liable or not. If you could help me with this question this would be great. If you are not able, please, let me know.


Thank you!

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply.

Provision of medical services for VAT purposes is covered with HMRC Notice 701/57 - Health Professional and pharmaceutical products. Your attention is drawn to Sec 2 - medical services provided by registered health professionals . Some services would be regarded exempt from VAT.

More information on this can be found here

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000121&propertyType=document#P39_2583


I hope this is helpful and answers your question.

Customer: replied 3 years ago.

Thank you for your reply!


Unfortunately, you still has not answered my question, but rather gave me reference to HMRC website. I contacted Just answer because I needed a professional interpretation of the information on HMRC website, not because I did not know how to look on HMRC website. No where on their website there is an answer to my question, but it appears to me that rather interpretation of the information is needed in order the specific question to be answered. If I was able to do so myself, I would have not contacted Just Answer.


My confusion is based on the fact that apart from S.2 which you mentioned there is S.6 and it states that 'This section explains the liability position of supplies of health professional staff. Generally speaking, apart from the nursing agencies’ concession mentioned below, all supplies of health professional staff are taxable for VAT purposes.'


I am not sure whether a limited company will fall into this category as it will be the physical person/doctor/ who will be providing the medical services not the limited company; on the other hand supplying medical staff generally means something like an agency which obviously is different from limited company set by an individual doctor in order to provide their services.


Once again, I would like to ask you to please clarify whether you can answer with simple yes or no my question /if possible with brief explanation on the grounds of your opinion/.


Thank you!

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply...

You have to separate the issue of how you are trading and the activity...
It is the provision of service and not the status of organisation that would determine whether the supply is taxable or not.

You may decide to operate as a sole trader, in partnership or as a LTD company.
If XYZ has its main activity as provision of medical services and these services are deemed taxable supplies for VAT purposes as outlined in VAt Notice 701/57 then the entity would be liable to VAT whether the entity is a sole trader of the LTD company.

Sec 5.1 states corporate bodies can make medical supplies provided that their medical services are wholly performed by employees who are health professionals.

I hope this is helpful.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.
Your reward of a bonus is greatly appreciated.

Best wishes.