Do counsellors and psychotherapists charge VAT?
Counselling sounds like healthcare, so many therapists assume it is VAT exempt. For most counsellors and psychotherapists it is not. Here is what HMRC says, who is exempt, and when you have to register.
By the NoteSono team · Last reviewed · 8 sources checked
The short answer
Counsellors and psychotherapists are not VAT exempt. HMRC only exempts health services from professionals on a statutory register, and BACP, UKCP and NCPS registers do not count. HMRC says psychotherapists "cannot currently exempt their services".
In practice most counsellors never charge VAT, because they earn below the £90,000 registration threshold. Once your fees go over £90,000 in any rolling 12 months, you must register and add 20% VAT. HCPC-registered practitioner psychologists are different: their therapy is exempt.
Who is exempt and who is not
| Practitioner | VAT on therapy sessions | Why |
|---|---|---|
| Counsellor (BACP, NCPS) | Standard-rated (20%) once registered | No statutory register |
| Psychotherapist (UKCP, BPC) | Standard-rated (20%) once registered | HMRC names psychotherapists as unable to exempt |
| HCPC practitioner psychologist (including counselling psychologist) | Exempt | Statutory register since 1 July 2009 |
| HCPC arts therapist | Exempt | Statutory register |
| Coach (any background) | Standard-rated | Not medical care |
HMRC's VAT Notice 701/57 lists the "health professionals" whose medical care can be exempt. They must be on a statutory register, such as the HCPC, GMC or NMC. Section 2.2 then says: "Therapists such as acupuncturists, psychotherapists, hypnotherapists and others who do not have statutory registers … cannot currently exempt their services."
HMRC's internal manual explains that the UK ties exemption to statutory registration as "the only sensible criterion", and names "psychotherapists and psychoanalysts" as professions that are not on a register. Accreditation by the Professional Standards Authority, which covers BACP, UKCP and NCPS registers, makes no difference for VAT.
The £90,000 registration threshold
Because counselling is a taxable supply, it counts towards the VAT registration threshold. You must register if:
- at the end of any month, your taxable income over the previous 12 months is more than £90,000, or
- you expect your taxable income in the next 30 days alone to be more than £90,000.
The test is rolling, not by tax year. Check it every month once you are getting close. You have 30 days from the end of the month you went over to register, and you charge VAT from the first day of the second month after.
How many sessions is £90,000?
| Session fee | Sessions a year to reach £90,000 | Per week over 44 working weeks |
|---|---|---|
| £60 | 1,500 | about 34 |
| £70 | 1,286 | about 29 |
| £80 | 1,125 | about 26 |
| £90 | 1,000 | about 23 |
| £100 | 900 | about 20 |
BACP's 2025 working practices survey found members averaged about 10 paid client hours a week, so most solo counsellors are well below the threshold. It mainly affects full-time therapists with high fees, practices that employ or contract other therapists, and those with large supervision or training income.
All your taxable income counts
Supervision, training, reports and coaching
- Clinical supervision of other therapists is a taxable service. HMRC has no specific guidance on it, but it is not medical care to a patient, so even an HCPC psychologist is unlikely to be able to exempt it.
- Training and CPD workshops you deliver personally as a sole trader may be exempt as "private tuition" if the subject is taught regularly in schools or universities. Training delivered through a limited company, or by people you engage, is usually standard-rated. Check with an accountant.
- Reports for courts, insurers or employers are standard-rated even for HCPC psychologists, because their main purpose is to help a third party make a decision.
- Coaching is not medical care and is standard-rated for everyone.
Can a counsellor ever be exempt?
There are narrow routes, and most solo practitioners will not fit them:
- Direct supervision by a registered health professional. Notice 701/57 sets strict conditions: the supervisor must be contractually responsible for your work, available the whole time you provide the service, and usually see the client first. Ordinary clinical supervision does not meet this.
- Working in a hospital or other state-regulated health institution.
- Welfare services supplied by a charity, public body or state-regulated welfare agency. This applies to the organisation, not to a private practitioner it contracts.
HMRC's manual says unregistered professions can lobby for a statutory register, but that is a matter for government, and HMRC "has no part in this negotiation".
If you do need to register
- Your clients are mostly private individuals who cannot reclaim VAT, so you either add 20% to your fee or absorb it.
- You can reclaim VAT on business costs such as room hire, software and training.
- The Flat Rate Scheme can simplify returns for small businesses. An accountant can tell you whether it would save you money.
- Your invoices must show your VAT number and the VAT charged.
- You can ask HMRC to cancel your registration if your taxable turnover falls below £88,000.
Making Tax Digital for Income Tax
Separate from VAT, Making Tax Digital for Income Tax now applies to self-employed therapists by income. You need to keep digital records and send quarterly updates to HMRC if your "qualifying income" (self-employment and property income before expenses) is over:
| Qualifying income in tax year | You must use MTD from |
|---|---|
| Over £50,000 in 2024 to 2025 | 6 April 2026 |
| Over £30,000 in 2025 to 2026 | 6 April 2027 |
| Over £20,000 in 2026 to 2027 | 6 April 2028 |
HMRC says it is your responsibility to check, even if you have not had a letter. See our guide to tax-deductible expenses for therapists.
Common questions
Is counselling VAT exempt in the UK?
Not for counsellors and psychotherapists on voluntary registers such as BACP, UKCP and NCPS. HMRC only exempts medical care from professionals on statutory registers. HCPC-registered practitioner psychologists and arts therapists can exempt their therapy.
Do I need to charge VAT as a counsellor?
Only if you are VAT registered. You must register once your taxable income goes over £90,000 in any rolling 12-month period. Below that, you do not charge VAT.
Are counselling psychologists VAT exempt?
Yes, if they are registered with the HCPC as practitioner psychologists and the service is medical care. Reports for courts or insurers are still standard-rated.
Does clinical supervision count towards the VAT threshold?
Yes. Supervision is a taxable service, so it counts towards your £90,000 along with therapy, training and coaching income.
Does BACP accreditation make counselling VAT exempt?
No. HMRC's test is registration on a statutory register. Professional Standards Authority accredited registers, such as BACP's, do not qualify.
Sources
Checked on 19 October 2026. Rules and prices change, so check the source before you rely on a figure.
- HMRC VAT Notice 701/57: health professionals and pharmaceutical products — sections 2.1, 2.2, 4.3, 4.9, 5.3; updated 13 August 2026
- HMRC VAT Health manual VATHLT2300 — psychotherapists and unregistered professions
- HMRC VAT Notice 700/1: should I be registered for VAT?
- HMRC VAT Notice 700/1 supplement: thresholds — £90,000 registration, £88,000 deregistration
- GOV.UK: Register for VAT
- HMRC VAT Notice 701/30: education and vocational training — private tuition
- GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax
- BACP Working Practices 2025 survey report — average paid client hours
This guide is general information, not tax advice. VAT rules depend on your exact circumstances. Speak to an accountant or HMRC before deciding whether to register.