Accountants for physiotherapists and accountants for therapists are answering opposite VAT questions, because the health exemption runs on statutory registration. A physiotherapist, osteopath, chiropractor or practitioner psychologist sits on a statutory register, so treatment fees are exempt. A counsellor, psychotherapist, hypnotherapist or acupuncturist does not, so fees are standard-rated at 20 percent and the £90,000 registration threshold becomes a live problem.
Which register you are on decides your VAT
VATA 1994 Schedule 9 Group 7 Item 1 exempts the supply of services consisting in the provision of medical care by a person registered or enrolled in one of a closed list of registers. Item 1(c) names the register kept under the Health Professions Order 2001. Item 1(ca) names the register of osteopaths maintained under the Osteopaths Act 1993, and item 1(cb) the register of chiropractors maintained under the Chiropractors Act 1994.
HMRC restates that list in VAT Notice 701/57, updated 13 August 2026. Section 2.1 defines a health professional as one of the named professionals "when they're enrolled or registered on the appropriate statutory register". Registration is the gate, and nothing about your training, your indemnity cover or your clinical competence opens it.
The Health Professions Order 2001 register is run by the HCPC. It covers physiotherapists, chiropodists and podiatrists, occupational therapists, dietitians, orthoptists, paramedics, radiographers and speech and language therapists. It also covers arts therapists, practitioner psychologists, prosthetists and orthotists, biomedical scientists, clinical scientists, hearing aid dispensers and operating department practitioners.
Titles follow the register. "Physiotherapist" and "physical therapist" are protected by law and only an HCPC registrant may use them. Section 32 of the Osteopaths Act 1993 and section 32 of the Chiropractors Act 1994 go further still, making it a criminal offence to describe yourself as an osteopath or a chiropractor when you are not registered.
Why counsellors and psychotherapists cannot exempt their fees
Section 2.2 is blunt: "Therapists such as acupuncturists, psychotherapists, hypnotherapists and others who do not have statutory registers as described in section '2.1 Meaning of a health professional' cannot currently exempt their services."
Counsellors are in the same position. BACP and UKCP hold Accredited Registers overseen by the Professional Standards Authority, which describes its own scheme as accrediting organisations holding registers of practitioners "not regulated by law". A voluntary register, however rigorous, is not a statutory one, and section 2.1 asks only about the statutory kind.
One entry in that list catches people out. A practitioner psychologist is HCPC-registered and exempt, and "counselling psychologist" is one of the protected titles inside that registration. A counsellor or psychotherapist holding no HCPC registration is standard-rated. Those two words sit next to each other on a directory listing and land on opposite sides of the VAT line.
| Practitioner | Statutory register | Clinical fees |
|---|---|---|
| Physiotherapist | HCPC, Health Professions Order 2001 | Exempt |
| Osteopath | General Osteopathic Council, Osteopaths Act 1993 | Exempt |
| Chiropractor | General Chiropractic Council, Chiropractors Act 1994 | Exempt |
| Practitioner psychologist, including a counselling psychologist | HCPC, Health Professions Order 2001 | Exempt |
| Arts therapist, occupational therapist, podiatrist, dietitian | HCPC, Health Professions Order 2001 | Exempt |
| Counsellor | None. BACP and UKCP registers are voluntary | Standard-rated at 20 percent |
| Psychotherapist | None | Standard-rated at 20 percent |
| Hypnotherapist, acupuncturist | None | Standard-rated at 20 percent |
What happens when a therapy practice crosses the VAT threshold?
Exempt income never counts towards the £90,000 taxable turnover threshold, which is why registration barely troubles a physiotherapy clinic and stalks a full counselling practice, and the registration test and its deadline are set out in the guide to GP VAT registration.
The decision at that point is whether to absorb the VAT or pass it on. Where your clients are private individuals with no VAT of their own to reclaim, passing it on means a visible price rise on every session.
Take Ms K, a psychotherapist trading as a sole trader and charging £70 a session. Her rolling 12-month turnover reaches £92,000 in the year to 31 October 2026, so she crosses the threshold during October and has to register by 30 November 2026.
Absorbing the VAT makes the £70 a VAT-inclusive price. One sixth of it is output tax, so £11.67 a session goes to HMRC and £58.33 stays with her. Across £92,000 of fees that is £15,333 of VAT and £76,667 left, a £15,333 fall in income for identical work.
Passing it on takes the session price to £84 and leaves her £70 intact, while every client pays £14 more. She can now recover VAT on standard-rated costs such as room hire and software, which for a talking-therapy practice with few overheads is a small offset against either figure.
What changes the answer: only taxable turnover counts, so earnings from a salaried post sit outside the calculation entirely and never push her over.
Does the register alone make your fees exempt?
No. Section 2.3 of Notice 701/57 sets two conditions and both have to be met. The first is that "the services are within the profession in which you're registered to practice". The second is that "the primary purpose of the services is the protection, maintenance or restoration of the health of the person concerned".
Section 2.5 gives the standard-rated side. It names services not aimed at the prevention, diagnosis, treatment or cure of a disease or health disorder, and general administrative services such as countersigning passport applications and providing character references.
Inside a registered practice, the watch items are the pieces of work somebody other than the patient commissions. A report written so that an insurer, a solicitor or an employer can make a decision carries no care element for the person examined. HMRC's VAT health guidance treats that kind of third-party report as standard-rated.
Conditioning or performance work sold as training rather than as treatment sits in the same doubtful territory. Pricing it on the assumption that VAT may apply is cheaper than discovering later that it did.
Where a single charge covers an exempt treatment and a taxable supply together, splitting it is a valuation question, and the guide to VAT in an optical practice deals with it. For the general mechanics of the healthcare exemption, see the guide to GP VAT registration.
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How does a clinic with both exempt and taxable practitioners work?
A clinic hosting a physiotherapist and a counsellor makes exempt supplies and taxable supplies from the same premises, which puts it into partial exemption. VAT on shared costs such as rent, reception and utilities is then recoverable only to the extent it supports the taxable side. You do not negotiate that split with HMRC. VAT Notice 706 section 4.1, updated 16 December 2025, is explicit: "You must use the standard method unless HMRC has given approval for you to operate a special method." The standard method applies automatically, so a small mixed clinic will normally use it and never approach HMRC at all. Approval only comes into it if the standard method gives an unfair answer and you want a special method instead.
Is the room rent you charge an associate exempt?
This question has no safe general answer, and any page that hands you one is guessing. Whether a room licence is an exempt supply of land or something else turns on what the agreement actually grants, and an option to tax over the building changes it again.
The employment-status question underneath, whether the associate is genuinely self-employed, is separate and just as expensive to get wrong. Read both against your own paperwork before you set a rate.
What else changes when you are not a doctor?
Private practice builds no NHS pension. An allied-health professional employed by a trust is an ordinary member of the scheme on that employment alone, and private fees accrue nothing. The NHS Pension Scheme guide is where to check membership, and it will not tell you anything about the private side.
Employment expenses are worth claiming and are not covered here. Flat-rate relief for uniforms and laundry, and the deductibility of professional subscriptions, are set out in the guide to NHS uniform tax relief and the laundry allowance, which names physiotherapists and other therapists directly.
The commercial questions, incorporating, taking on associates or buying a partner out, follow the same rules here as in any other private healthcare practice, and the existing private-practice material on this site covers them. What a specialist accountant does across healthcare more generally is in the guide to healthcare accountants.
If you are working out which side of the register your practice sits on, or what registering for VAT would do to your fees, our work covers the liability position and the arithmetic before you change a price. Get in touch to arrange a call.