VAT for Osteopaths, Physios and Healthcare Professionals: What’s Exempt and When to Register
If you’re an osteopath, physiotherapist, chiropractor, or other healthcare professional running your own practice, understanding VAT is essential, especially when you’re growing your business. Some services are VAT exempt, others aren’t, and knowing the difference can help you stay compliant while saving time and reducing stress.
In this guide, we’ll walk you through VAT exemptions for healthcare and teaching services, as well as the latest VAT registration threshold for UK businesses.
Why This Matters
VAT compliance might not be top of your list when you’re focused on patient care, but it’s a key part of running a sustainable practice. Knowing what’s exempt can help you:
-
Avoid charging VAT unnecessarily (which could price you out of the market).
-
Prepare for the point when you do need to register.
-
Stay compliant with HMRC, reducing the risk of penalties.
Whether you’re operating solo or growing a team, understanding VAT helps you make informed decisions and avoid admin headaches down the line.
VAT and Healthcare: What’s Exempt?
Many healthcare services are VAT exempt if they are focused on protecting or restoring a patient’s health and are delivered by a qualified professional. Here’s how it breaks down:
1. Osteopathy
VAT exempt – as long as the service is provided by a registered osteopath.
This exemption applies under HMRC rules that cover healthcare delivered by regulated professionals. As long as your treatment is for medical purposes (not purely cosmetic), no VAT needs to be added to your invoices.
Source: HMRC VAT Notice 701/57
2. Physiotherapy, Chiropractic, and Other Therapies
In most cases, services delivered by registered physiotherapists, chiropractors, and similar professionals are also VAT exempt – so long as:
-
You’re appropriately registered with the relevant health body (e.g. HCPC or GCC).
-
The treatment has a therapeutic purpose (i.e. not purely for relaxation or wellness).
If you offer services that blend medical treatment with lifestyle or wellness advice (such as massages), you may need to apportion what’s exempt and what’s taxable.
When Do You Need to Register for VAT?
Even if most of your services are exempt, you still need to monitor your turnover carefully.
As of 1 April 2025, the UK VAT threshold is:
-
£90,000 for compulsory registration
-
£88,000 for deregistration
This threshold is based on taxable turnover only, which means exempt income (like registered osteopathy) usually doesn’t count towards the threshold. But if you also sell taxable items (like wellness products, training courses, or gift vouchers), you’ll need to keep an eye on your totals.
? More info: VAT registration thresholds – gov.uk
Expert Tips & Common Pitfalls
Tip: Keep your qualifications and registrations up to date. HMRC may require proof that your services are exempt, especially in the event of an inspection.
Pitfall: If you mix exempt and taxable services, you may need to apply partial exemption rules. These can be complex, so it’s worth speaking to your accountant early.
Tip: Don’t assume all healthcare is exempt. Cosmetic procedures, general wellness sessions, or corporate wellbeing packages may be VATable.
Tip: Track your income streams separately – this helps clarify what’s exempt and what’s taxable, making VAT calculations (or exemptions) much easier. Xero can help with this.
Let’s Make VAT Easy
VAT can be complicated, but it doesn’t have to be. Whether you’re offering hands-on therapy, online training, or a blend of both, we can help you figure out what applies to your business and how to stay ahead of your obligations.
Need clarity on your VAT position? Book a call with Love Accountancy and we’ll walk you through it, step by step.
About Love Accountancy
At Love Accountancy, we work with healthcare professionals across the UK to make tax and finances feel easy – not overwhelming. Whether you’re a registered osteopath, physiotherapist, or chiropractor, we’ll help you stay VAT compliant, plan for growth, and avoid unexpected tax bills.
Looking for a trusted accountant in Exeter or support with online accounting UK-wide? We’re here to help you manage your business your way – with expert advice and Xero-powered efficiency.