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VAT Registration for Medical Aesthetic Practitioners

VAT tax aesthetics

One question that is quite commonly debated among new aesthetic practitioners is that of VAT registration and at what point you should apply to get your business registered for VAT.

A delegate recently asked the question:

“Do you think it’s worth becoming VAT registered even if you’re not at the threshold yet?”

Lee Cottrill, Business Development Manager, gives his advice in response:

“It’s a maths question which you should assign to your accountant to give you the answer.

“The job is to weigh up 2 things and see which one has the greatest cost/benefit.

  1. Input VAT – the supplies you buy for your business very often have VAT. For example, there’ll be VAT on swabs (this is known as the VAT on your “inputs” ie the things which are going INTO your business). If you register for VAT then you can claim back all this VAT = money coming back to you.
  2. Output VAT – If you register for VAT then you have to charge your customers the VAT (this is the VAT on your “outputs”). This will mean one of two ways:
    1. Increase your prices by 20% so that you don’t lose out
    2. Keep your prices the same but you’ll have to pay over 20% to the government so you’ll be 20% worse off.

“Now… if the benefit from what you save on your INPUTS is GREATER than what the VAT is that you have to pay out to the government on your OUTPUTS then it’s fairly clear cut that it’s beneficial to register for VAT.

“This would definitely be the case if you increase your prices by 20% because you’ll reap the benefits on your inputs saving but have none of the pain on your outputs.

“BUT if you keep your prices the same then you’ll be taking a 20% hit on your sales and profit and I’d be very surprised if the savings on your inputs VAT would outweigh that.”

So that’s the simple maths to help you work at whether it’s worth registering for VAT before you reach the threshold.

3 Strategic Reasons to Register for VAT Early

There are 3 further reasons why it you may wish to consider registering for VAT earlier than you need to:

  1. If you are investing in capital items or equipment which included substantial VAT,  eg a commercial building or expensive equipment, being VAT registered may be of benefit in terms of reclaiming the VAT element of that spend (or some of it!)
  2. You may feel that being VAT registered gives a certain amount of kudos or credibility in the business community
  3. Being VAT registered implies a turnover in excess of £85,000, You can register at any point prior to that and may feel that it gives the impression that your business is bigger than it is in reality

Business Advice for Aesthetic Practitioners

Whether you are self-employed or running a small company, you’ll find that working in aesthetics business entails having to think about the business side as well as delivering injections and treatments.

Some of the questions that you’ll face are quite specific to aesthetics and it can be really useful to get advice.

SkinViva Training knows that learning doesn’t end with the training course and we’re here to help or point you in the right direction, whatever your query.  The most highly praised area of our ‘after training support’ is the Facebook closed group/forum, where delegates can openly discuss anything with their peers from techniques and supplies to accounting and business questions.

It’s just one more way SkinViva Training stays with you every step of the way.

 

FAQs – Support After Training

SkinViva Training Manchester

SkinViva Training Ltd offer a range of professional training courses for cosmetic and medical skin treatments.

Their courses in cosmetic treatments directed at suitably qualified and registered medical professionals who wish to learn and build on their skills in delivering these procedures.

See our full list of forthcoming training course dates.

SkinViva Training was established in 2013 by Dr Tim Pearce MBChB BSc (Hons) MRCGP – learn more about us. The SkinViva Training team upholds high standards of clinical training providing a combination of fully-supervised practical experience together with essential theory.

For further information, to discuss which course is right for you, to enquire about availability or to book a training course please call 0161 850 2491, or email info@skinvivatraining.com.

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