Alongside its NHS contract a typical GP practice earns a long tail of private and non-NHS income: private medicals and forms, insurance and medico-legal reports, travel clinics and vaccinations, occupational health, privately funded minor surgery, and various signing and certification fees. These streams are easy to under-record, and they carry the practice's only real VAT exposure, because while genuine clinical care is exempt, the reports and certificates that enable a third party to make a decision (and any purely cosmetic work) are standard-rated.

This guide maps the streams, explains how each is taxed as practice trading income, and draws the exempt-versus-standard-rated VAT line clearly, with the £90,000 threshold and partial exemption that follow from it. It hands the registration and partial-exemption mechanics to our GP practice VAT registration guide rather than repeating them.

What Counts as Private and Non-NHS Income (and What This Page Is Not)

The scope here is income the practice earns outside its NHS GMS, PMS or APMS contract and outside dispensing, paid by patients, employers, insurers, solicitors and other third parties rather than by the NHS.

One distinction needs stating up front. This page is about the practice's non-NHS income streams as practice trading income: how those streams sit in the partnership accounts, how they are taxed on the partners' profit share, and the practice-level VAT consequence. It is not about an individual consultant or GP managing their own NHS salary alongside their own private work. For that individual NHS-plus-private position (how a doctor's personal earnings stack up, their own pensionability and whether to incorporate their personal private work), see our separate guide to private practice tax and NHS and private income. We do not repeat that individual analysis here.

One principle runs through this whole page. Genuine medical care (protecting, maintaining or restoring the patient's health) is VAT-exempt, but work whose primary purpose is to enable a third party to make a decision (reports, certificates, some medicals) and purely cosmetic work are standard-rated. That purpose test is the thread that connects every stream below.

Why does this matter so much for a GP practice? Because the practice's core NHS income is outside the scope of VAT, and most of its clinical work is exempt, so a GP practice often goes years without thinking about VAT at all. The private and non-NHS streams are the part of the practice that can change that. They are the only income that can be standard-rated, and therefore the only income that can build towards a VAT registration obligation. A practice that grows its reports, medicals and occupational-health work without watching the VAT line can find itself over the registration threshold without realising it, which is why mapping these streams and their VAT treatment is a practice-management issue, not just an accounting footnote.

The Main Private and Non-NHS Income Streams

For each stream it helps to give three things: what it is, how it is taxed, and the VAT line. The tax answer is the same every time (practice trading income, taxed on the partners' profit share, not NHS-pensionable), so we keep that short and let the VAT line carry the detail.

Private Medicals and Forms

Examples include insurance medicals, pre-employment and fitness medicals, HGV, LGV and taxi-driver medicals, sports and diving medicals, fitness-to-fly assessments, adoption and fostering medicals, and private sick notes and forms. VAT: most of these are standard-rated, because their primary purpose is to inform a third party's decision (an employer, an insurer, a licensing body), not to treat the patient. Pre-employment medicals and driving-fitness medicals are standard-rated, and are worth flagging explicitly because practices often assume anything medical is exempt.

The common thread is that the patient is examined not to treat them but to certify something to a third party: that they are fit to drive a lorry, fit to take up a job, fit to dive or fly, or suitable to adopt. The clinical skill involved does not make the supply exempt; the purpose does, and the purpose here is the third party's decision. A useful contrast is the same patient coming in because they feel unwell: that consultation is exempt care. The HGV medical on the next appointment, for the same person, is standard-rated, because its purpose is the licensing body's decision rather than the patient's health. Practices that run a steady volume of medicals should treat the whole category as standard-rated by default and identify the rare genuinely therapeutic exception, rather than the other way round.

Examples include insurance reports on a patient, GP factual reports for solicitors, medico-legal and expert-witness reports, court reports and capacity assessments for legal purposes. VAT: standard-rated, because the principal purpose is to enable a third party (an insurer, a court, a solicitor) to make a decision. There is a narrow exception where a report is genuinely part of the patient's own care, which can be exempt, but the default for third-party reports is standard-rated, so lead with that.

This is the area where the purpose test bites hardest and where practices most often get it wrong. The instinct is to treat anything a doctor writes about a patient as medical, and therefore exempt. The test asks a different question: what is the report for? A report written so that an insurer can decide whether to pay a claim, or so that a court can decide a case, is enabling a third party's decision, not treating the patient, and so it is standard-rated even though only a doctor could write it. The fact that the doctor draws on the patient's clinical record does not change the purpose. Expert-witness reports and medico-legal reports have been firmly standard-rated since the purpose test came in, so a practice doing meaningful volumes of this work should treat it as taxable from the outset.

Travel Clinics and Travel Vaccinations

VAT: the vaccination itself is medical care and is exempt, because administering a travel vaccine protects the patient's health, and the international certificate of vaccination is part of that exempt supply. This is the opposite of reports, and the contrast is worth making clearly: travel-clinic income is largely exempt. Any goods sold alongside the clinic, such as anti-malarial tablets supplied on a private prescription, follow the private-prescription rule and can be standard-rated; our guide to dispensing practice income, accounts and tax covers that private-prescription point.

Minor Surgery and Minor Procedures Done Privately

Where privately funded minor surgery is done for a clinical (therapeutic) reason it is exempt medical care. Where it is purely cosmetic with no therapeutic purpose it is standard-rated. This is the clean illustration of the purpose test: the same procedure can be exempt or taxable depending on why it is done. Note that NHS-commissioned minor surgery is an enhanced service rather than private income; see our guide to enhanced services and GP practice income tax for that distinct stream.

Occupational Health Services

Some practices provide occupational health to local employers. VAT: mixed, and often standard-rated where the service is for the employer's benefit (fitness assessments, management reports) rather than treating the worker. Occupational health is a watch-item, so review the specific service mix and take advice rather than assuming a single answer for the whole contract.

Signing Fees, Certification and Administrative Work

Examples include passport countersignature, certifying documents, firearms certificates and some cremation work. VAT: largely standard-rated where there is no care element, because this is administrative or third-party-decision work, though some statutory certificates (cremation certificates, for example) are treated as exempt. The liability here is genuinely item-specific, so check each item against HMRC's table rather than applying one rule to the whole category.

Other Private Clinical Work

Private GP consultations and self-pay clinics, where the purpose is genuinely the patient's health, are exempt medical care. This reinforces the default: genuine private clinical care is exempt, not standard-rated. It is wrong to assume all private work is taxable, just as it is wrong to assume all medical work is exempt.

Taken together, the streams fall into a clear pattern. The clinical, treatment-focused work (private consultations, therapeutic minor surgery, travel vaccinations) is exempt, just like NHS care, because its purpose is the patient's health. The third-party-facing and administrative work (reports, fitness medicals, certifications) is standard-rated, because its purpose is someone else's decision. And cosmetic work is standard-rated because there is no therapeutic purpose at all. Once a practice sees its private income through that lens, classifying a new stream becomes a matter of asking one question: who is this for, and what is it meant to achieve? That single question, applied consistently, gets the VAT treatment right far more reliably than any list memorised in isolation.

How Private and Non-NHS Income Is Taxed

It is all practice trading income. Whatever the practice invoices and collects for private work is part of the partnership's trading profit, taxed on the partners as part of their profit share through the SA800 and their personal SA104, exactly like NHS income. There is no separate regime; it simply increases trading profit, and a partner is taxed on their allocated share, not their drawings. See our complete guide to GP partnership tax for the mechanics, and our guide to GP partnership profit sharing and tax planning for how the income is shared between partners.

It is not NHS-pensionable. Private and non-NHS income is not NHS-derived, so it is not pensionable under the NHS Pension Scheme; the Type 1 certificate captures NHS-derived profit only. Our guide to GP pension contributions and tax relief covers what is and is not pensionable.

Recording and under-recording. Private income is invoiced and collected by the practice directly. It does not come through PCSE, so nothing external chases it, which makes it the income stream most often under-recorded or banked inconsistently. Clean recording matters for both tax and the VAT threshold. See our GP bookkeeping guide and GP accounting guide for how to capture it reliably.

The under-recording risk is worth dwelling on, because it is specific to private income and easy to overlook. NHS income arrives in known amounts on a statement the practice can check; private income arrives in dribs and drabs, often as cash or cheques handed over at reception for a form or a report, sometimes invoiced and sometimes not. If there is no consistent process for raising an invoice, banking the receipt and recording it against the right income category, money simply leaks: a report written but never billed, a medical fee taken at the desk and not banked, a travel-clinic payment recorded inconsistently. Beyond the immediate loss, weak recording also distorts the VAT threshold monitoring, because the practice cannot see how much standard-rated income it is actually generating. A simple, enforced routine (every chargeable piece of private work is invoiced, every receipt is banked and coded) protects both the income and the VAT position.

Expenses against private work. Costs incurred to earn private income are deductible against practice profit on normal wholly-and-exclusively principles. Our guide to the complete list of GP tax deductions covers what qualifies.

VAT: the Exempt-Versus-Standard-Rated Line and What It Means

The Principle (the Purpose Test)

A service is exempt only where its principal purpose is the protection, maintenance or restoration of the patient's health and it is within the doctor's registered field (VATA 1994 Schedule 9 Group 7, Item 1). Where the primary purpose is to enable a third party to make a decision, or the work is purely cosmetic, it is standard-rated. This is the d'Ambrumenil purpose test, in force since 1 May 2007. It is a test of purpose, not of who pays or whether the work is private.

A Practical Exempt-Versus-Standard-Rated List

Drawing on HMRC's liability table for doctors, the broad picture is:

  • Standard-rated: pre-employment medicals and reports; HGV, LGV and driving-fitness medicals (including supporting blood tests and ECGs); medico-legal and expert-witness reports; coroner's post-mortem work; paternity and DNA blood tests; passport countersignature; and purely cosmetic procedures.
  • Exempt: genuine clinical consultations and treatment; therapeutic minor surgery; travel vaccinations and the international certificate of vaccination; cremation certificates; and reports that are a genuine part of the patient's own care.

The table is the reference, and the liability is decided service by service on the purpose test. Where a service does not fit neatly, check it against the table and VAT Notice 701/57 rather than guessing.

The £90,000 Threshold (Taxable Turnover Only)

Only the standard-rated turnover (and any zero-rated dispensing turnover) counts towards the £90,000 VAT registration threshold; exempt clinical income and outside-the-scope NHS income do not. So a practice doing mostly exempt clinical work with a modest amount of reports and medicals usually stays under the threshold, while a busy reports, medicals and occupational-health operation can cross it. Our GP practice VAT registration guide covers the registration mechanics and the £88,000 deregistration threshold.

Partial Exemption

A registered practice with both exempt and taxable supplies operates partial exemption: it can recover input VAT on costs relating to its taxable (standard-rated) work but not on costs relating to exempt care, subject to the de minimis test. The de minimis test broadly allows full recovery where the exempt-related input VAT averages no more than £625 a month and £7,500 a year and is no more than 50% of total input VAT; above those limits, the exempt-related input VAT is not recoverable. The detail belongs in our VAT registration guide; the point to take here is that registration does not give full input-VAT recovery, because most of the practice's clinical income is exempt.

The practical consequence is that, for a typical GP practice, VAT registration driven by reports and medicals is more about compliance than about reclaiming large amounts of input VAT. The recoverable input VAT relates only to the taxable side (the costs of producing the reports and medicals), which is usually a small part of the practice's total spend, while the bulk of the practice's costs relate to its exempt clinical work and are not recoverable. So registration should be understood as an obligation that follows from crossing the threshold, with a modest recovery benefit, rather than as a planning opportunity. The planning that does matter is monitoring the standard-rated turnover so the practice knows when it is approaching the threshold and can prepare, rather than crossing it unnoticed and registering late.

Common Mistakes and Planning Points

  • Under-recording private income, because it does not come through PCSE and nothing external chases it.
  • Assuming all medical work is exempt, and so missing a VAT registration obligation once reports and medicals cross the threshold.
  • Assuming all private work is taxable, and so over-charging VAT on genuine clinical care that should be exempt.
  • Treating travel-clinic vaccination income as standard-rated (it is exempt) or report income as exempt (it is standard-rated).
  • Not agreeing who in the partnership earns or keeps private income, which is a partnership-agreement point rather than a tax rule.

That last point deserves a little more. In many practices certain private work is done by particular partners (the GP who holds the occupational-health contract, or the one who does the bulk of the medico-legal reports), and the partnership agreement may say whether that income is pooled and shared like everything else or retained by the partner who earns it. There is no single right answer, but there is a wrong outcome, which is an arrangement that was never written down and is then disputed when one of those partners leaves or the volumes change. Settling it clearly in the agreement, and accounting for the income consistently with what the agreement says, avoids friction later. Our guide to GP partnership profit sharing and tax planning covers how prior shares and special allocations of this kind are structured.

Private income does not appear on the PCSE statement, so it sits outside the NHS reconciliation discipline and needs its own controls. For the NHS side, see our guide to reading and reconciling PCSE statements, which covers the NHS payments that do flow through PCSE.

How We Help GP Practices With Private Income

Private and non-NHS income is the part of the practice's money most likely to be under-recorded and most likely to be in the wrong VAT box. We help practices capture every private stream cleanly so it is taxed correctly and so the VAT threshold is monitored accurately, classify each stream against the purpose test (exempt care versus standard-rated reports, medicals and cosmetic work), manage the registration and partial-exemption position where the practice crosses the threshold, and keep the practice's income clearly separated from any individual doctor's personal private work. The result is income that is fully recorded, correctly taxed, and correctly treated for VAT.

This guide is general information and not advice for your specific circumstances. For tailored support, see our services for GPs or get in touch with our medical accounting team.