There have been a number of recent VAT disputes between taxpayers and HMRC which have gone to the First Tier Tribunal (FTT), specifically regarding the provision of cosmetic treatments, and whether these can be considered supplies of medical services, and therefore be exempt from VAT. For the most part, HMRC have been successful in these challenges, and the FTT judges have decided that a variety of cosmetic treatments cannot be considered as medical services, as they do not have a therapeutic purpose, and are therefore taxable at the standard rate of 20%.
Cosmetic Treatments are VAT exempt medical services.. aren’t they?
Am I affected?
If your organisation provides cosmetic treatments, such as Fillers, rhinoplasty, and liposuction, just to name a few examples, for these treatments to considered as a non taxable medical services, there needs to be a degree of consultation, diagnosis, and a line of treatment. It cannot be just for cosmetic or aesthetic purposes.