Summer 2006 Newsletter


Brave New World

Business Not Pleasure

Summertime Blues

All That Glitters...

Casting The Net

Trust Gordon?

It Ain't Over...

One In The Eye

Keep Your Nose Clean

Foreign Affairs

When Is A Car...

Don't Walk Away

Avoiding, The Issue

Brown Is Anti-PC

VAT's Up Doc?

Fuel's Gold

An Age-old Question?

That's Unfair!

Year In Year Out

How Hard To Try?

It's A Rip-Off!

Outlaws Win

Show Some Restraint

Not Our Problem

They Cannot Be Serious?


Pension Disappointments

VAT's Up Doc?

A number of doctors' practices have registered for VAT for the first time in April this year. This won't make much difference to the patients - most of what a doctor does isn't VATable - but it will make a bigger difference to the practice, which will have to get used to filing VAT returns.

The reason is a change in the way the NHS reimburses doctors for the drugs they use. Drugs are bought with VAT attaching, and sometimes that VAT is recoverable from Customs - if the doctor is registered for VAT. The NHS used to reimburse the VAT to doctors who weren't registered, but their new line is: "if you could get it back from Customs, you can't get it back from us". This seems pointless, as one government department or the other should be picking up the bill, and the poor doctors are stuck in the middle. But that's how it is.

There is a possible problem with being VAT-registered. If you do something which isn't covered by the normal VAT exemption for medical care, you will have to charge VAT on it, even though it's only a small amount and below the normal registration threshold of £61,000 a year. Customs have been carrying out a consultation on whether doctors should charge VAT on some fringe activities such as examinations for insurance policies or legal claims. They haven't yet published the results, but it's possible that doctors who registered in April - to recover some VAT on the cost of drugs - may later this year find that they have to start accounting for output tax on some of the things they have traditionally not charged VAT on.

If you are a doctor and need help with your VAT, we will be happy to help.