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  • leoniecitron

Choosing an accountant

This month I’d like to share with you an experience as relayed to me by a new client. This person, whom I shall call AB , attended a lecture I gave a number of years ago to a room full of therapists. It is important to consider what type of therapy – it could be osteopathy, chiropractic, physiotherapy or podiatry. AB picked up on the fact that if you own a clinic that provides other therapies, there could be a VAT consequence. AB went away from the talk and quizzed their accountant who assured them that AB had nothing to worry about.


Twelve months later when AB handed in the next set of accounts, AB again raised the matter and was told there was not a problem.


Another year went by and this time, before going to the accountant, AB took on a new bookkeeper who was sufficiently well trained to ask the same questions. This time when AB raised it with the accountant, the response was “I’d better research this for you.” Feeling less than secure, AB came to see me.


I provided guidance as to where the demarcation was between VAT exempt activities and potentially non-exempt activities. For the record the demarcation is as follows: -


Treatments provided to human patients where the intention is to maintain or improve their health are exempt from VAT when provided by practitioner on the appropriate registers. Generally this applies to doctors, physiotherapists, osteopaths, chiropractors and chiropodists. Other treatments or services are not exempt – examples would be writing medical reports, providing treatments to animals etc. Treatments provided in such areas as massage, acupuncture, Pilates and yoga will generally not be exempt from VAT except in the circumstances where such modalities are provided as part of the treatment protocols as laid down and supervised by an exempt practitioner or provided directly by an exempt practitioner. So where a physiotherapist includes acupuncture in their treatment, then the acupuncture becomes an exempt supply.


Where your aggregate non-exempt supplies exceed £85,000 over a twelve month period, you are obliged to register for VAT and charge it in those non-exempt modalities.


In the case in point, after much detailed analysis of figures, I have ascertained that AB owes something in the region of £30,000 in VAT going back over the last 3 years. To this will be added late registration penalties and interest and surcharges for late payment of VAT. So AB will now have to find the VAT plus penalties and my fees for all the work sorting it out.


At this point under my advice AB looked to see whether the relevant professional body would assist in a complaint against her previous accountant; at which time AB realised that nowhere on any paperwork did the accountant have any letters after their name, nor were they supervised by any of the accountancy bodies. Which means that AB’s only remedy would be a civil claim against the old accountant.


This leads me to my key point – would you ever allow a family member to be treated by a non-qualified osteopath/ chiropodist /physiotherapist/chiropractor/podiatrist? The answer is a definite no. Why then would you trust your financial wellbeing to an unqualified and unsupervised accountant?


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