Gender gap: what GPs said
Three-quarters of GPs will have to become VAT-registered, possibly as early as next April, under Government plans to implement a European court ruling, writes Ian Cameron.
Practices with a turnover of £60,000 or more this year from non-NHS work such as pre-employment medicals and compiling medical reports would have to register.
The move, which has been forced on GPs by a European Court of Justice judgement in November 2004 that such work was liable for VAT, will cause an increase in workload and could hit GPs' profits.
The BMA has described the rule change, which is expected to affect practices with four or more partners, as 'a huge culture change' for GPs.
Consultation on implementing the ruling in the UK ends in December. Medical accountants said there was no reason why the change could not then come into force from next April.
Bob Senior, vice chairman of the Association of Independent Specialist Medical Accountants, said GPs would have 21 days to register after an announcement of the date when non-NHS work becomes taxable. GPs who failed to register in time could face a fine and have to pay backdated VAT.
The BMA said it could not fight the European Court ruling but would focus its efforts in the consultation on pointing out 'grey areas' on what was chargeable.
Dr Peter Holden, chair of the BMA's professional fees committee, pledged to ensure the rule change had the 'least impact' on the profession.
He said: 'What's for certain is we are not reducing our fees.'
One problem already identified was that smaller practices which did not need to register would be able to charge less than those over the £60,000 threshold and have to add the 17.5 per cent on.°