Registering for VAT for VAT Exempt Services

[Pratch]

Exploring the possibility of establishing a private psychology therapy/treatment service (I'm a qualified psychologist). Based on a colleague, estimated gross income of over €100k. Expenses could run €10-15k per year (office rent, assessment materials, etc.).

Revenue has psychological treatment as VAT example. Even though I would go above the services VAT threshold (€37.5k) I am not required to register: "A person carrying out only exempt activities or non taxable activities may not register for VAT."

However, I'm wondering if it would be in my own interests to register, given I could reclaim €2-3k in VAT on expenses every year.

If I did this, is it taking advantage of the VAT exempt business? Although this may be seen as tax avoidance, my understanding is that avoidance is legal.

 

[ClubMan]

Although this may be seen as tax avoidance, my understanding is that avoidance is legal.

Not always.

Tax avoidance

Description of what tax avoidance is and how it is dealt with

www.revenue.ie

 

[T McGibney]

"A person carrying out only exempt activities or non taxable activities may not register for VAT."

You've answered your own question there.

 

[Ciru75]

What you're proposing would be VAT fraud. Exempt businesses are not entitled to recover VAT on their costs.

 

[Pratch]

You've answered your own question there.

I read the "may not" as optional. I'd have understood it better if it said "A person carrying out only exempt activities or non taxable activities is not allow to register for VAT."

What you're proposing would be VAT fraud. Exempt businesses are not entitled to recover VAT on their costs.

Thanks for clarity. Glad I didn't then. Did not want to do anything of the sort, was only trying to see what was allowable. Cheers.

 

[T McGibney]

I read the "may not" as optional. I'd have understood it better if it said "A person carrying out only exempt activities or non taxable activities is not allow to register for VAT."

May not definition

May not means is not permitted to or is not authorized to....

absolute prohibition

 

[Pratch]

May not definition

Good to know. I'll stick to psychology as the day job and steer clear of law and accounting