VAT and the Cosmetic Surgery Industry

Many businesses that provide procedures, including Botox, dermal fillers, hair transplants and other similar procedures, believe that the services they provide are exempt from VAT as they are being provided for medical purposes. However, HM Revenue & Customs (HMRC) will regard the procedures that are primarily for aesthetic purposes as a VATable supply at the standard rate (20%).

A business can only regard its services as an exempt supply for VAT purposes when the services are within the profession in which the person providing the services is registered to practice (or they can supervise a non-medically qualified person). The primary purpose of the service must also be the protection, maintenance or restoration of the health of the patient.

Who is exempt from paying VAT?

Health professionals are exempt from charging VAT on their services if they are registered under the relevant statutory frameworks. This includes:

• Medical practitioners, including optometrists, dispensing opticians, osteopaths and chiropractors.
• Professionals registered under the Health Professions Order 2001, such as arts therapists, biomedical scientists, chiropodists or podiatrists, clinical scientists, dietitians, hearing aid dispensers, occupational therapists, operating department practitioners, orthoptists, paramedics, physiotherapists, practitioner psychologists, prosthetists and orthotists, radiographers, speech and language therapists, and any additional professionals added in future.
• Nurses, midwives and health visitors.
• Dental professionals, including dentists, dental hygienists, dental therapists, dental nurses, clinical dental technicians, dental technicians and orthodontic therapists.
• Pharmacy professionals, including pharmacists and pharmacy technicians in Great Britain (England, Scotland and Wales only).

Health practitioners who are not part of the statutory registers, such as acupuncturists, psychotherapists, and hypnotherapists are not exempt.

What criteria must treatments meet to be exempt from VAT?

Not every treatment delivered by a health professional automatically qualifies for VAT exemption. HMRC sets out specific conditions that must be satisfied for services to fall outside the scope of VAT. These conditions are:

• Professional scope: the treatment must be carried out within the boundaries of the profession in which the practitioner is registered. A service delivered outside of that professional scope would not qualify for exemption.
• Purpose of treatment: the main purpose must be the protection, maintenance or restoration of the patient’s health. If the treatment is provided for other reasons, for example, cosmetic purposes alone, it will not be exempt.

When both of these requirements are met, treatments and services can qualify for VAT exemption.

What treatments are exempt from VAT?

Treatments delivered by health professionals registered under the relevant statutory frameworks can be exempt from VAT.

• Health services delivered under General Medical Services, Personal Medical Services, Alternative Provider Medical Services, General Dental Services and Personal Dental Services contracts.
• Sight testing and prescribing by opticians (England, Wales and Northern Ireland only).
• Primary and secondary eye examinations (Scotland only).
• Enhanced eye health services.
• Laser eye surgery.
• Hearing tests.
• Treatments provided by osteopaths and chiropractors.
• Nursing care provided in a patient’s home.
• Pharmaceutical advice.
• Services involving the diagnosis of illness or the analysis of samples forming part of a diagnosis.

By contrast, services that are undertaken solely for cosmetic purposes do not qualify for exemption and are liable for VAT.

How we help businesses in the health sector understand their liabilities and exemptions

At The VAT People, we recognise the challenges businesses in the health sector face when distinguishing between VAT-exempt medical services and treatments considered aesthetic, which are subject to VAT. Our role is to remove the uncertainty by providing clear, practical advice on how VAT applies to the services you provide.

HMRC is paying close attention to income streams in this area, with a focus on whether VAT registration is required. With decades of experience, supported by the expertise of former HMRC officers and consultants, we offer specialist guidance to help you apply the correct VAT treatment, minimise risk, and maintain compliance. From clarifying exemptions to advising on reporting requirements, we provide the insight you need to make confident decisions.

To speak to one of our VAT specialists, call us today on 0161 477 6600. Alternatively, complete our online contact form and we will respond promptly.