Steve,
A few points - the government are trying to push all 'sole traders' into
becoming limited companies.
The EP will only be charging VAT because he/she has been told to do so by
their local VAT Office - An EP is unlikely to be able to reclaim much VAT on
his purchases and registering would not confer any significant advantage. The
threshold for registering is about £50,000 per year (less than 200
assessments) - but he/she may have other income or other circumstances such
as a partnership which push them over the limit without putting a lot of cash
in their pocket.
But this is not the whole story, Customs & Excise can require a trader to
register if their monthly turnover exceeds 1/12th of the threshold.
OK, that's why. As far as you are concerned if the EP has been told to
register and charge VAT then you have to pay it. Their clients cannot claim
any exemption. Your institutiom may be able to reclaim it if they pay direct.
Perhaps your finance department can give you advice.
Assessments are not eligible for zero rated VAT - As the EP's repport is
diagnostic then this is understandable (sort of) However, even once
'disability' has been recognised VAT is still chargeable on needs
assessments. I have tried arguing the case for DSA needs assessments being
VAT exempt twice but lost both times. At least 3 assessors/centres have to
charge VAT including one NFAC centre. Some centres in colleges do not have to
charge VAT - but the situation is very complex. DfES accept that VAT may have
to be paid on EP reports and needs assessments.
I'm surprised more EP's aren't registered for VAT, £50,000 is not a huge
income to run a busy professional practice on especially if there is more
than one person involved. I suspect that several may be ignoring VAT,
assuming that their clients are exempt.
Mick Trott
In a message dated 13/03/03 16:47:44 GMT Standard Time,
[log in to unmask] writes:
<< One of the Educational Psychologists that we use has informed us
that he is having to set up as a company and will then need to
charge our students VAT on his dyslexia assessments. Does
anyone have experience of Ed Psychs charging vat?
Steve.
Steve Metcalfe >>
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