September 2016 Issue 84
www.independent-practitioner-today.co.uk
INDEPENDENT PRACTITIONER TODAY
The business journal for doctors in private practice
In this issue
Wellington doesn’t get the boot The competition watchdog says forcing HCA to sell hospitals is a ‘disproportionate’ remedy P25
When you’re under suspicion
A medical crime lawyer explains what doctors can expect to undergo if they are accused of a crime P26
£12.50
FREE INSIDE! A 12-page pull-out supplement of leading practice management suppliers to the aesthetic medicine industry at next month’s CCR EXPO
Don’t let Brexit vote deter you
Worried about stock markets? Our investment guru explains why it’s important to keep calm P36
£1m VAT victory
By Robin Stride
A consultant dermatologist has been saved from a crippling £1m-plus tax bill after his accountant – an Independent Practitioner Today columnist – settled a VAT case out of court. HM Revenue and Customs (HMRC) contended that the specialist’s company should have registered for the tax, as the business was largely providing ‘cosmetic’ procedures as opposed to procedures for medical purposes. But the doctor’s camp successfully argued that although he carried out non-medical procedures, the amount was miniscule compared to medical procedures and was certainly below the VAT registration limit of £83,000 on a rolling annual basis. The case underlines the need for doctors to keep meticulous records – which this now much-relieved consultant did. He described the 18 months of the case as ‘a living hell’. Any consultants with concerns about their VAT position are being advised to take advice about the whole issue. Accountants fear some may have done non-medical treatments exceeding the registration threshold. Accountant Susan Hutter said: In association with
‘The confusion arises with HMRC, as their definition of “cosmetic” is different to the medical definition. ‘Although the patient may think they are going to the doctor for a cosmetic procedure – i.e. because after the procedure they look better than before – the actual definition as to whether or not the procedure is non-medical depends on whether or not there are any medical benefits. ‘If the treatment improves, repairs or enhances the skin, including repairing sun damage, then it is a medical procedure.’ She said it appeared that HMRC
originally thought any procedure that included the use of Botox, fillers or laser was almost certainly non-medical, making it purely cosmetic and therefore VAT- chargeable. But she told Independent Pract itioner Today: ‘We clearly proved that the procedures carried out by our client, apart from a miniscule amount, were for the protection, maintenance or restoration of skin-related diseases/disorders. ‘Therefore, the primary purpose of the services was for medical not cosmetic benefit. Had HMRC been successful, they could have gone back to the commencement
of trading and demanded the VAT from that time to date. ‘As this was more than ten years ago, the VAT itself could have been in the region of £1m plus.’ Mrs Hutter, of Shelley Stock Hutter, London, said the case’s success was helped by the consultant keeping excellent records of all treatments and appointments. In virtually all cases, apart from the very few, these proved they were all medical procedures. She described the outcome for the consultant as ‘life-changing’. n See more on this story in Accountant’s Clinic next month. Susan Hutter this month – page 10
Publication of fees delayed Consultants are having to wait to see when the Private Healthcare Information Network (PHIN) will publish their fees. The Federation of Independent Practitioner Organisations (FIPO) now plans to return to the Comp etition and Markets Autho rity (CMA) with new evidence gathered since the competition watchdog’s 2014 final report on its private healthcare inquiry. FIPO lost an appeal court chal-
lenge this summer against findings of the Competition Appeal Trib unal (CAT). But FIPO then said more recent material changes to market circumstances had caused ‘an adverse effect on competition that restricts patient choice’ and the appeal court could not consider these issues. PHIN boss Matt James said: ‘Publishing fees is a more complex process than you might first imagine so it needs careful design, but
it’s a great opportunity to move the sector forward. ‘We believe that transparency on both clinical quality and fees will mean that consultants who offer good value will do well, leaving plenty of scope for different approaches to value.’ He said the CMA needed to consult on a new timetable. n Patients’ views matter, page 12 n On our website: ‘Private units have to supply data for patients’