Are locum pharmacists vat exempt?

Working as a locum pharmacist can prove an excellent career option in many situations. You get an incredible amount of professional variety and freedom, while receiving a competitive rate of pay. Due to the ageing population in the UK, it’s also likely going to be a stable career option for quite some time to come. 

That being said, it can be a little confusing what regulations apply, especially in the realm of tax. If you’re unsure about your VAT exemption as a locum pharmacist, read on for a quick tour of the subject.

Who needs to register for VAT?

In the UK, most businesses need to register for VAT (value added tax) if they earn over £85,000 a year. This also counts for those who are self-employed, as in these situations, the individual is essentially considered to be a business. VAT should then be added to invoices, and will need to be paid by the customer. 

That being said, there are certain circumstances in which businesses and individuals might be exempt. Whether or not this applies to locum pharmacists is a contentious subject, and unfortunately, there’s no clear-cut answer.

Exemptions

There are a variety of both goods and services that are considered exempt from VAT, and thus even if their sale exceeds £85,000 the business in question would not need to register for VAT. Goods and services that are considered exempt include education, insurance, and importantly in this case, health services.

Now, the sticking point here is whether locum pharmacists, whether they find work through agencies such as Pharma Seekers or through other channels, are considered to be providing a healthcare service or the service of staff. 

If it is considered to be the provision of staff, and the locum pharmacist in question was earning over £85,000 a year, then they would need to be VAT registered. HMRC are not clear on which one applies, and it has been argued both ways over the past decade or two.

Seek help from an accountant

If you find yourself in this situation, it’s likely best to seek specific advice from an accountant who’s helped locum pharmacists out before. There are numerous different specificities that need to be considered, including your exact employment structure and how much you earn. 

Your accountant will be able to ensure that you have your business structure set up in just the right way, and can ensure that you’re not paying more tax than you need to. If you only want help on that single matter, you don’t need to hire the accountant to do your whole tax return – you can just pay them to research the matter based on your circumstances and give you a solid answer. 

We understand that you might have wanted to receive a clear cut, yes or no answer, but it’s clearly not quite that simple. There are multiple factors that need to be taken into account, and even then, it’s a contentious issue. It’s best to have a qualified and experienced accountant to back you up and provide you with some case-specific information.

*This is a collaborative post.