Accountants for health and wellness practitioners
Medical care from a registered health professional is exempt from VAT, and cosmetic and non-therapeutic work is standard rated, even from the same practitioner. We track the two separately, bring all your income into one return and review your room and associate agreements.
Call or WhatsApp 07476 989568
VAT exemption for medical care
Medical care provided by a registered health professional is exempt from VAT. The exemption depends on the purpose of the treatment, so purely cosmetic or non-therapeutic work can be standard rated even when the same practitioner performs it in the same room.
Practices that add aesthetics, wellbeing services or retail to a clinical list can reach the VAT registration threshold on that taxable income alone. The threshold is £90,000 of taxable turnover in any rolling twelve months.
- Clinical treatment by a registered health professionalExempt
- Cosmetic treatment with no therapeutic purposeStandard rated
- Wellbeing coachingStandard rated
- Most fitness and nutrition workStandard rated
- Creams, supplements and supports sold at receptionStandard rated
Adding aesthetics to a clinical list
A physiotherapy practice adding cosmetic work
A practice with £140,000 of exempt clinical treatment adds aesthetic treatments, which are standard rated. Only the taxable side counts towards registration.
The clinical £140,000 is irrelevant to the test: it is the £92,000 that triggers it. From registration the aesthetic and retail prices either rise by a fifth or the margin on them falls by a fifth, and partial exemption then governs how much input VAT you can recover. These decisions are best made before taxable turnover reaches the threshold.
Worked through at 2026/27 rates from our own calculators, which follow gov.uk guidance checked in July 2026. This is an example and your figures will differ.
- Employment, with PAYE
- Self-employed private clients
- A room let out
- Teaching and workshops
Mixed income in one return
Part-employed, part self-employed, plus a room let out and perhaps some teaching. Each strand is taxed differently and only the Self Assessment return brings them together.
The common error is assuming PAYE on the employment has covered enough tax. Often it has not, because the self-employed profit pushes total income into a higher band.
Room rental, associates and employment status
Whether you are renting a room or being engaged by the clinic decides who is responsible for your tax, whether the payment is VATable, and whether you have employment rights. Most arrangements we see have never been written down, and the paperwork usually says something different from what actually happens.
Points to self-employment
- You set your own hours and fees
- You keep your own client list
- You carry your own indemnity insurance
- You bear the financial risk
Looks more like employment
- The clinic books your diary
- The clinic sets your prices
- The clinic supplies the clients
- The clinic pays you a percentage
Getting it wrong leaves the clinic liable for PAYE and National Insurance. Have the arrangement reviewed before it has been running for two years.
A practice paying associates a percentage of fees needs the arrangement documented and consistent with how it actually runs. It is the largest status risk in a small clinical practice, and a written agreement that matches how the practice runs deals with it.
What you can claim, and what is disputed
Straightforward
Professional indemnityRegistration feesProfessional body feesDBS checksCPDRoom hireClinical suppliesEquipmentSupervisionPractice management software
Where the arguments happen
ClothingTraining for a new qualificationUse of home where you also practise elsewhereTravel from home to a regular clinic
Practice tax dates
Taxable turnover is tested over any rolling twelve months, whatever your accounting year.
Of going over £90,000, or expecting to in the next 30 days alone.
Register for Self Assessment in your first year of self-employed income.
Return, balancing payment and first payment on account.
Second payment on account.
Associate and room agreements reviewed against how the practice actually runs.
Source: gov.uk VAT health professionals and Self Assessment guidance, checked July 2026. See key tax dates.
Practitioners’ questions
How much does it cost?
Accounts and tax start at £29 + VAT a month for a sole trader and £49 + VAT for a limited company, the fee rises with turnover, and the instant quote shows yours in four questions. For practitioners the drivers are the number of income streams that need keeping separate (locum shifts, private clients, room-rental clinic time, workshops or online products), plus whether you are VAT registered and whether anyone is on payroll. Mixed income adds the work, whatever the amount, because each stream can carry a different status and VAT question. FreeAgent is included, worth up to £330 a year, and questions between appointments are covered by the monthly fee.
Is my income exempt from VAT?
Not automatically. The exemption for medical services applies to care provided by a registered health professional for the purpose of protecting, maintaining or restoring health, so it turns on both who you are and what you are doing. Cosmetic treatments without a therapeutic purpose, wellbeing coaching, most fitness and nutrition work, and the sale of products are generally standard-rated. A practitioner with a mix of exempt and taxable income may also face partial exemption on their input VAT. This is worth establishing before you approach the £90,000 threshold.
What can I claim as a practitioner?
Professional registration and indemnity insurance, supervision, equipment and consumables, room hire, CPD that maintains existing competence, practice management software, and the business proportion of home working where you see clients or do admin there. The distinctions that catch people out: training that qualifies you in a genuinely new modality is often capital and disallowed rather than a normal expense, and travel between home and a clinic you attend regularly is commuting. Keep records digitally, since Making Tax Digital will require it from your mandation date.
How do I keep client confidentiality and still hand records to an accountant?
By separating the financial record from the clinical one. We need what was invoiced, to whom in name only or by reference, when it was paid and what it was for, and never case notes, diagnoses or anything clinical. Practice management systems generally export a financial report that contains exactly that and nothing more. If your system does not, use client references rather than full details on the ledger. Your professional body’s confidentiality requirements sit above any convenience in bookkeeping.
Should I be a limited company?
Check your professional body’s rules first, because some regulated professions restrict how practice can be structured or require specific arrangements for indemnity and ownership. Once that is clear, the usual test applies: incorporation starts to make sense when profits are consistently above what you need to draw personally, and less so when they are not, given the extra cost of accounts, filings and payroll. If you hold contracts with the NHS or an insurer, check whether they will contract with a company before restructuring around the assumption they will.
Accounts and tax for your practice
From £29 + VAT a month for a sole trader, £49 + VAT for a limited company
Taxable income tracked
Exempt and taxable income tracked separately, so you can see the VAT threshold approaching.
All your income in one return
Employment, self-employment, room income and teaching brought together in one Self Assessment return.
Room and associate agreements reviewed
What the paperwork says, checked against how the arrangement works in practice.
Every professional cost claimed
Indemnity, registration, professional bodies, DBS, CPD, supplies and equipment.
Partial exemption handled
Once you are registered, we calculate how much input VAT you can recover.
A plan before you expand
What adding a service line does to VAT, status and staffing, before you commit to it.
Call or WhatsApp 07476 989568 or email hello@buzzaccounting.co.uk
For a growing practice
Business PulseAn annual budget, a rolling 12-month cash flow forecast, management accounts and a review meeting every month or quarter. From £375 + VAT a month, on top of your accounts fee. Outsourced finance teamBookkeeping, payroll, VAT, customer invoicing and month-end, done for you in Xero. From £750 + VAT a month. Part-time finance directorPeter Allen as your fractional finance director: an annual plan, a cash flow forecast, a KPI dashboard and a quarterly board meeting. From £2,000 + VAT a month.Accreditations and partnerships
