As you may be aware, dentistry is exempt from VAT (which is commonly taken to mean very annoying tax, but of course actually stands for value added tax). However, "non medical" treatments such as botox and teeth whitening do fall within the scope of standard rated VAT.

If an individual is required to register for VAT (and the supply is standard rated as with botox/teeth whitening etc), you would then be required to charge VAT to your patients of 15%. You would collect this from your patients on behalf of HMRC, and pay this over to HMRC. This means that something you may now charge your patients £100 for, would cost the patient £115.

It also means that you could reclaim VAT that you have paid for goods and services related to that particular supply. This means that for any materials used for teeth whitening/botox that you have purchased and suffered VAT on, you can reclaim the VAT you have suffered from HMRC. This can only be reclaimed for goods in relation to treatments that are standard rated.

You cannot reclaim VAT on other supplies for normal dentistry (as that is exempt for VAT) such as fillings, dental chairs, etc, so you can stop grinning if you thought you had just stumbled across a nice little scheme!

You will have to collect the VAT from patients and after deducting VAT suffered on the direct materials and pay the balance over to HM Revenue and Customs, generally on a quarterly basis. There may be VAT inspection visits etc to check that you are doing what you should do correctly – so no slacking!

If the turnover relating to these "non medical" treatments exceeds £67,000 in any 12 month period, HM Revenue and Customs must be notified of your liability to register for VAT. (If this is not done and the matter is discovered you will be deemed to have collected VAT within the price charged using the appropriate fraction and will have to pay this over with penalties and interest etc.) You don’t want that to happen as the VAT man will then, effectively be helping himself to a slice of your profits. That is to say, you would have only charged your patient £100, but HMRC will say that included VAT (as you will be deemed to have done so). That means the £67,000 you have collected from patients will be deemed to represent 100% plus 15% VAT, and so the actual price of the treatment was £58,260. You will have to pay over £8,740 to HMRC. Ouch!

However, as we understand it, if the treatments are being provided by you and your associates, then as each associate is a self employed person, you and/or the associates would only be liable to register for VAT if each such individual’s own turnover relating to such treatments exceeds £67,000 in any 12 month period.

For the above to apply, it must be made perfectly clear to the patient, that the dentist providing their whitening/botox etc., is the one they should contact in case of any problems – NOT the practice. The practice should still be able to collect money from the patient in respect of botox etc provided by associates, but the invoice should be in the name of the associate. This should make absolutely certain that HMRC could not regard the whole turnover of the practice from botox etc when looking to assess if there is indeed a liability to register for VAT. It should have to look at each associate on their own.

Of course the above course of action is only necessary if the practice’s turnover from botox/teeth whitening etc., is likely to exceed £67,000 in any 12-month period.

Therefore, unless an associate (or you for that matter) is singularly grossing £67,000 or more per annum for such treatments, there should not be a need to register for VAT.

Also, don’t forget you need separate PI Insurance for such treatments.