VAT Submission 2024

Irish Association for Counselling and Psychotherapy

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Your selected constituency is Cork North West. If this is correct complete the form below to send a message to your TDs & Senators. If this is the wrong constituency then use the dropdown menu to select the correct one.

TDs in Cork North West constituency

Aindrias Moynihan TD (FF)

Michael Moynihan TD (FF)

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Dear (each TD / Senator will get a separate, personalised email),

I am one of the 6,000 members of the Irish Association for Counselling and Psychotherapy and we are calling for increased accessibility to therapeutic services by extending the VAT exemption to counsellors and psychotherapists in Ireland.

The IACP’s comprehensive VAT proposal was submitted to the Minister of Finance in March and calls for creating equity of treatment and parity of esteem for mental health professionals providing psychotherapy and counselling services, with those who deliver physical health care.

There is an increasing demand for mental health services amidst a global rise in mental health conditions. To address these issues, it is crucial to establish a transparent and fair tax system that supports the accessibility and affordability of mental health services, ultimately benefiting both practitioners and clients alike.

How You Can Help:
As your constituent, I’m asking you to support our proposal by raising this matter in the Dáil on behalf of the IACP and the public by asking parliamentary questions to create more awareness of this important issue and encourage the Minister of Finance to take action immediately to ensure equitable treatment of mental health professionals as well as removing the burden of taxation on clients when paying for essential therapeutic services.

Key issues highlighted by the IACP in relation to current VAT legislation include:

- Thresholds: Ireland's low VAT turnover threshold of €40,000 (from 2024) compared to the UK's £85,000 poses burdens on small businesses.

- Compliance Costs: Low registration thresholds increase compliance expenses, affecting both practitioners and clients.

- Consumer Bears the Tax: VAT burdens clients, hindering access to mental health support, unlike psychologists or psychiatrists whose services are VAT exempt.

- Services vatable by nature/ characteristic of service: VAT is a European Tax and is subject to the  principles of proportionality, neutrality, and equality.

- Equal Treatment: Equality is a general principle of European law, which can be put into any submission in context of lack of equality of treatment between psychologists and counsellors/psychotherapists.

- Unfair Competition: Discrepancies in VAT treatment between different professions (example – psychologists being VAT exempt, despite not being regulated) create unfair competition, impeding access to care.

- Registration Test: It is unfair that counsellors and psychotherapists suffer financial setbacks during the prolonged statutory register setup by CORU. The delay appears to financially benefit the government, posing fairness questions in Public Law alignment.

- Anomalies: Ireland's tax laws must be clear and predictable for effective governance. An inconsistency exists in VAT treatment between psychologists and counsellors/ psychotherapists, where psychologists' services are exempt while counsellors and psychotherapists face a 13.5% VAT rate. Interestingly, if a therapist holds psychology qualifications, the service becomes VAT exempt, despite similar functions. Another anomaly arises in the recognition of counsellors and psychotherapists by state bodies such as HSE, for medical treatment, yet they lack VAT exemption. This inconsistency questions the coherence of the regulatory framework. A function-oriented VAT approach based on service nature is crucial. Aligning recognition by public health authorities with VAT treatment would enhance regulatory coherence.

In light of these considerations, the IACP calls for a pre-registration VAT exempt status for qualified and accredited IACP members and seeks to rectify the inequities arising from the delay in establishing the statutory register. This proposal aligns with established practices and ensures that fair treatment prevails in the interim period.

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Yours sincerely
etc,