When Counsellors and Psychotherapists provide services to clients for a fee, and, where those fees exceed the €37,500pa threshold, those services are liable to VAT at 13.5%. Once the threshold is reached, all of your fees are subject to VAT, not just the excess over the threshold amount.

Last July, Counselling and Psychotherapy services were brought into the net for regulation purposes, when they were designated “for the purposes of the Health and Social Care Professionals Act 2005.” Many of the other professions which come under that legislation are exempt from charging VAT on their services.

So, the question arises whether Counselling and Psychotherapy services are also exempt.

The Minister for Finance, in response to a Dail question, has indicated that our services will become exempt from VAT from the date of registration. (You can read the question and the Minister’s answer here.) However, the Minister’s answer does not address some further questions, such as: If you are already registered for and charging VAT on your services, should you continue to do so? If you are not registered and you are getting close to the threshold, should you register for VAT and start charging your clients the extra amounts?

As you are probably aware, the Counsellors and Psychotherapists Board was appointed with effect from 25^th February 2019. It is estimated that creating the necessary structures for registration will take up to two years.

I am not a tax expert, and this short article is not an expert opinion, so if this situation affects you (for example, if you are currently charging VAT or likely to reach the exemption threshold in the near future), then perhaps you should consult your accountant or tax advisor about this matter.

If I can help you with any aspect of your practice, please contact me for an appointment or your free 20 minute consultation.