Tax Appeals Commission determination 32TACD2022 regarding VAT, 2022

Administrative Decision Number32TACD2022
Date31 March 2015
Subject MatterVAT
1. Outline of the issues
1. This appeal comes before the Tax Appeals Commission by way of an appeal against a
decision by the Respondent that psychotherapy and counselling services provided by
the Appellant were liable to VAT at the reduced rate of 13.5%. The Appellant
contends that this decision is incorrect, and that the services which she provides are
exempt from VAT.
2. Evidence & Factual Background
2. I heard evidence on oath from the Appellant at the hearing of this appeal. I found her
evidence to be truthful and consistent and it is appropriate to record that her
testimony as to facts was not challenged by the Respondent.
3. The Appellant testified that she had been carrying on the business of providing
counselling and psychotherapy services since in or about 2 . She had obtained the
qualifications of B.A. and M.A., followed by a post-graduate Diploma in Counselling.
The Appellant has at all material times been a member of the Irish Association of
Councillors & Psychotherapists. This is the largest professional body representing
counsellors and psychotherapists in Ireland, with approximately 4,000 members
from student members to accredited members in practice. At the time of the hearing
of the appeal, the Association accredited councillors, psychotherapists and
supervisors, and also accredited academic courses at Diploma, Degree and Masters
levels. To become an accredited member of the Association, an applicant had to attain
a minimum level of academic qualification and clinical experience, including post-
training experience under supervision, as well as completing a formal process of
Garda vetting.
4. The Appellant gave evidence that a significant proportion of her work involved the
provision of psychotherapy and counselling to adult survivors of abuse. These
patients were initially screened by the HSE and then referred to therapists such as
the Appellant. The Appellant gave evidence that she was not a diagnostician and did
not diagnose patients. In cross-examination, the Appellant stated that some 20% of
her work came through referrals from the HSE.
5. I was also referred in this regard to an announcement by the HSE dated 11 July 2013,
regarding the launch of its Counselling in Primary Care Service. The announcement
stated that a short-term counselling service would be made available to medical card
holders by referral through a GP or Primary Care Team, and would comprise up to
eight sessions with “a professionally qualified and accredited Counsellor Therapist.”
The Appellant submitted that this demonstrated that the HSE recognised and utilised
Counsellors and Therapists to deliver health care services in the community.
6. In the course of an audit of the Appellant and , the Respondent wrote to
the Appellant’s agent on 31 March 2015 and stated that psychotherapy services were
liable to the charge of VAT at the reduced rate of 13.5% under paragraph 21(1) of
Schedule 3 of the Value Added Tax Consolidation Act 2010 a s amended (hereinafter
referred to as VATCA 2010), which provided for the application of reduced VAT to:-
“Services consisting of the care of the human body, including services supplied in
the course of a health studio business or similar business, but not including the
exempted activities referred to in Part 1 of Schedule 1 or hairdressing services
referred to in paragraph 13(3).”
The letter further referred to the Respondent’s VAT on Medical Services Leaflet.
7. The letter further stated that section 4 of the Health and Social Care Professionals Act
2005 provided a list of “designated professions”, which included the profession of
psychologist but did not include psychotherapists. Section 4 of that Act provided for
Ministerial Regulations to be made to designate additional professions but none had
as then been made to include psychotherapists as a designated profession. The letter
therefore asserted that psychotherapy services were taxable both pre- and post-1
January 2010, with an exemption being given only where psychotherapy services
were provided by a qualified psychologist.

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