Health & wellness · 🇬🇧 United Kingdom
Exempt treatment income, taxable product sales, one bank account
A practice assuming all its income was VAT-exempt had been accruing a registration obligation on product sales.
UK health & wellness practice, mixed exempt and taxable income. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
2
Income streams separated
£90k
Threshold correctly monitored
Registered
Position regularised
The situation
- The practice provided treatments (largely VAT-exempt where delivered by a registered professional) and also sold supplements and products.
- Everything went through one account and was treated as exempt.
What we found
- Product sales are standard-rated and count towards the £90,000 registration threshold; treatment income largely does not.
- Taxable turnover had crossed the threshold roughly seven months earlier.
- Some treatments delivered by unregistered staff did not qualify for exemption either.
What we did
- Separated exempt and taxable income at the point of sale.
- Established which treatments qualified for exemption based on who delivered them.
- Registered for VAT, filed the outstanding periods, and set up partial exemption calculations.
The outcome
- The practice is registered and correctly monitoring taxable turnover rather than total turnover.
- Partial exemption recovery on overheads offset part of the historic liability.
What we'd flag
VAT on seven months of product sales was never charged to customers and came out of margin.
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