VAT exemption for psychotherapists and counsellors

Unlike other health services, psychotherapy, psychotherapeutic counselling and counselling services are not exempt from Value Added Tax (VAT). We are actively campaigning to extend VAT exemption to talking therapies, a long overdue measure that will remove a needless barrier to people accessing care. 

What is VAT? 

Value Added Tax (VAT) is a consumption tax added to many products and services in the UK. Businesses in the UK have to register for VAT at a certain threshold. In 2025, this threshold is now £90,000 in taxable turnover over a 12-month period.  

Who pays VAT? 

Businesses that exceed the £90,000 threshold in the UK pay VAT on their products and services. This applies to psychotherapy, psychotherapeutic counselling and counselling private practices, both individual and group. VAT fees are either absorbed by the service provider/business or reflected in increased charges to the client. Clients are typically not VAT registered and therefore cannot reclaim VAT on psychotherapy fees. 

Why is VAT exemption important? 

Extending VAT exemption to talking therapies is important for several reasons.  Firstly, VAT on therapeutic services acts as a barrier to the expansion of private affordable therapy. The cost of VAT can be reflected in increased fees or increased cost to the practitioner, which raises the cost to accessing care. 

Secondly, VAT reflects a disparity between how different types of mental health care are treated. Whilst psychologists, art therapists and dance therapists, who the government chooses to regulate by statute, offer VAT exempt services, counsellors and psychotherapists cannot.  

As part of our campaign to extend VAT exemption to talking therapists, we have recently submitted a joint letter to the government in response to the spending review in February 2025. More information about this joint letter and our campaign will be available shortly.