COSMETIC TREATMENTS ARE VAT EXEMPT MEDICAL SERVICES.. AREN’T THEY?
HEALTHCARE SERVICES
NHS
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PRIVATE HEALTHCARE
COSMETIC CLINICS
SUPPLIERS
PROCUREMENT
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Background
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.
What do I need to do?
Business operating in this sector need to be especially careful.
We would recommend re-visiting and reviewing your VAT treatment immediately on such procedures. HMRC are very active in the medical industry and appear to be challenging those who have been treating their services as exempt, so it is vital that you get clarity on the VAT liabilities of the services you are providing, and understand the risk of continuing to adopt that treatment in light of these cases.
How can BBVAT help?
We can undertake a review of your services and provide a view as to whether the business is at risk of challenge from HMRC.
Our VAT health checks are popular with health care businesses that want to ensure that the VAT treatment adopted reflects HMRC’s current thinking and whether VAT savings can be made or there is opportunity to adopt a more favourable VAT treatment on supplies.
Please use our VAT helpline for any initial questions.
Please use our VAT helpline for any initial questions. Our VAT helpline is completely free.
The helpline provides for 30 minutes of technical support and advice on any VAT issue, and including email or call and follow up response for your file. If you have a query or would like our help, you can call us on 01732 868266, email us at info@bbvat.co.uk, fill out the form below or submit an enquiry on our website here.
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