Dental services are exempt from VAT, but a VAT case has just gone through the courts, highlighting that dentists providing facial aesthetics need to register for VAT when their treatments do not constitute medical care. This compliance is essential to avoid penalties for dentists providing facial aesthetics.
The case involved Aesthetic-doctor.com Ltd (ADCL) v HMRC [2024] TC09030, which found that a private medical clinic offering cosmetic treatments was not providing medical care and that its supplies were not exempt from VAT.
ADCL’s sole owner and director was Dr McKeown, a qualified doctor registered with the General Medical Council and the British College of Aesthetic Medicine.
HMRC’s view was that ADCL had an income of more than £85,000 a year supplying purely cosmetic treatments, which did not constitute medical care and would have been exempt from VAT.
Item 1, Group 7, of Schedule 9 of the VAT Act 1994 exempts the provision of medical care by certain registered medical practitioners. Medical care in this context means diagnosing, treating, and, as far as possible, curing diseases or health disorders.
The facts of the case were:
- There is no evidence to establish that ADCL was providing medical care.
- ADCL failed to prove the nature and extent of physical or physiological health disorders for individual patients.
- Patients chose ADCL’s services because they wished to improve their appearance.
ADCL could not produce adequate evidence to support its supplies being exempt from VAT within the medical care exemption.
Its appeal was dismissed, and the £1.65m VAT assessment to its income from 1 June 2010 stood.
If you are a dentist providing cosmetic treatments to patients, such as Botox, facial volumising fillers, dermal fillers, and laser treatments for a non-medical reason, you must consider VAT registration.
The first thing to address is your annual income from cosmetic treatments.
You do not need to register compulsorily if your annual income is under the VAT threshold of £90,000. You could voluntarily register for VAT, but by not registering, you save your patients from paying VAT on any cosmetic treatments you offer.
Should you need to register for VAT, only the cosmetic income VAT is charged. Any income from dentistry will remain exempt from VAT.
