Guy Smith explains why the tax authority is training its beady eye on the cosmetic medical industry, and outlines potential consequences for operators in the sector HMRC is embarking on a VAT raising campaign targeting the rapidly growing cosmetic medical sector. The focus of attention is whether treatments such as Botox, dermal fillers, sculpting and thread lifts qualify for medical exemption from VAT.
In HMRC’s opinion, the treatments should be treated as standard rated; a view which has recently been supported by a decision at the First-tier Tribunal (FTT) in the case of Illuminate Skin Clinics Ltd (TC/2019/05352).
Illuminate had made a claim for VAT credit in relation to the period ending December 2016, which HMRC had denied, on the grounds that the supplies made during the period were not exempt from VAT.
In a complex ruling, the Tribunal considered written and oral evidence from Dr Sophie Shotter, the Director of Illuminate, and reviewed a bundle of documents totalling 1241 pages. But, ultimately, it decided the supplies did not constitute medical care within the proper meaning and effect of the legislation.
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