Podiatry treatment is VAT exempt. Goods applied to the patient during that treatment are exempt with it. Goods that are separable from the treatment usually are not, and standard-rated sales count towards the VAT registration threshold in a way your exempt clinical income does not.
That three-way split is set out in HMRC's own notice, and it is the thing most content on this subject gets wrong. Accountancy blogs tend to say "podiatry is exempt" and stop. Orthotics suppliers tend to conflate exemption with zero-rating, which is a different mechanism with different consequences.
Are podiatry services exempt?
Yes. VAT Notice 701/57 section 2.1 lists chiropodists and podiatrists among the registered health professionals whose services qualify, on the basis of HCPC registration.
Section 2.3 adds the purpose condition: the primary purpose must be the protection, maintenance or restoration of the health of the person concerned. Ordinary podiatric treatment clears that easily. Our discipline-by-discipline VAT guide has the full list.
That much is uncontroversial. The interesting question is what happens to the things you hand the patient.
The three-way fork on goods
Section 3.1 of the notice draws the line, and it is worth quoting rather than paraphrasing. Charges for bandages, drugs, medicines or prostheses administered or applied to your patient in the course of the treatment are exempt along with the treatment. But items separable from the treatment are not exempt, and will usually be standard-rated. The notice's own example of the separable category is items privately dispensed for the patient to administer themselves.
So:
| What you supply | VAT treatment |
|---|---|
| The consultation, assessment and treatment | Exempt |
| Dressings, padding or a device applied during that treatment | Exempt |
| An item handed over separately for the patient's own use | Usually standard-rated |
So which one is an orthotic?
It depends on how it is supplied, and that is largely within your control.
A device casted, fitted and adjusted as part of an episode of care is difficult to characterise as separable. It is the output of the treatment, delivered in the course of it.
An off-the-shelf insole sold from the reception display to somebody walking in is a retail sale of goods. There is no treatment for it to be part of.
The awkward middle is a custom device ordered after an assessment, delivered at a later appointment, possibly by post. Reasonable people take different views, and the answer turns on whether the supply is genuinely part of a continuing course of treatment or is better characterised as a product sale that followed a consultation.
The test is not how clinical the item feels, nor how much expertise went into specifying it. It is whether it is separable from the treatment.
Two practical consequences follow. Keep the clinical record clear about what was done and when, because that record is the evidence of how the supply was structured. And be consistent, because a practice that treats identical supplies differently depending on how the invoice was raised has a problem either way.
What about zero-rating for disabled people?
This is the mechanism most often invoked and most often misunderstood.
VAT Notice 701/7 provides zero-rating for certain goods supplied to a person who is chronically sick or disabled, for their personal use. Zero-rating is not the same as exemption: a zero-rated supply is taxable at 0%, which keeps it inside the VAT system, whereas an exempt supply sits outside it.
The relief is narrower than practitioners assume. The goods must be designed solely for use by a disabled person. "Mainly for" or "commonly used by" is expressly insufficient. The customer must be chronically sick or disabled, and a written eligibility declaration is required.
Notice 701/7 does zero-rate certain medical and surgical appliances, including specialist footwear. Whether general orthotics or insoles fall within that is not something we can state as settled, and it is likely to depend on the specific device. Take advice on your own product range rather than assuming, and note that guidance from other jurisdictions, including Ireland, is not UK law and should not be relied on.
Why does this matter if you are small?
Because of how the registration threshold counts.
The VAT registration threshold is £90,000 of taxable turnover. Exempt supplies do not count towards it. Standard-rated supplies do.
That produces a genuinely awkward outcome. A podiatrist with £150,000 of purely clinical income never has to register, because all of it is exempt. A podiatrist with £84,000 of clinical income and £9,000 of standard-rated orthotic sales has crossed the threshold on the orthotics alone, and must register, even though clinical work is 90% of the business.
Your orthotics bench can push you into VAT registration on its own. That is the commercial sting, and it is why the classification question is worth getting right before it becomes retrospective.
Once registered you are partly exempt, which brings apportionment rules for reclaiming input VAT. There is an upside there worth knowing: input VAT on goods you buy to make standard-rated supplies may become recoverable, which softens the blow. It is also firmly accountant territory.
Where the ranking content goes wrong
Two errors are worth naming so you can spot them.
"Podiatry is exempt, therefore everything you charge is exempt." This ignores section 3.1 entirely and is the most common error in accountancy-blog coverage.
Treating zero-rating and exemption as interchangeable. Orthotics retailers frequently advertise "VAT exemption" for disabled customers when they mean zero-rating under Notice 701/7. The customer outcome looks similar, but the mechanism, the eligibility conditions and the paperwork are different, and only one of them requires a written declaration.
What to do
- Separate your income streams in your bookkeeping so you can see taxable turnover independently of exempt income
- Decide, and document, how you supply devices and whether they form part of an episode of care
- If you rely on zero-rating, collect the written eligibility declarations properly and keep them
- Watch the £90,000 line on your taxable turnover, not your total turnover
- Take advice before your product range grows, because the answer depends on the specific devices
Keeping the clinical record and the invoice telling the same story is the practical backbone of all of this. Systems like Atlacare hold invoices with line items against the patient record alongside the clinical note, so the relationship between what was treated and what was supplied is evidenced rather than reconstructed.
This is general information about VAT treatment, not tax advice. The classification of any particular supply depends on its specific facts, and the zero-rating position for individual devices requires advice. Thresholds and guidance change, typically each April.
Sources: VAT Notice 701/57, health professionals · VAT Notice 701/7, reliefs for disabled and older people · VAT registration thresholds
Related: Is my practice VAT exempt? · POM-A and POM-S annotations for podiatrists · Can I sell meal plans as a digital product?
