Aesthetic-Doctor.Com Ltd v The Commissioners for HMRC
[2024] UKFTT 48 (TC)
Epem Limited v The Commissioners for HMRC
12 July 2023
[2023] UKFTT 627 (TC)
First-tier Tribunal
A clinic was told they had to pay VAT. They said their treatments were medical and shouldn't have VAT. But they couldn't prove most of their work was actually medical, so the judge said they had to pay VAT.
Key Facts
- •Epem Limited appealed HMRC's decision to compulsorily register them for VAT from 1 August 2007.
- •Epem argued their services were exempt medical services, thus below the VAT registration threshold.
- •HMRC contended that a substantial portion of Epem's services were cosmetic, not medical.
- •Epem provided various treatments including laser treatments, varicose vein treatments, minor surgical procedures, and Botox.
- •Epem was not registered with the Care Quality Commission (CQC).
- •Epem failed to provide sufficient evidence to HMRC regarding the nature of their services and the proportion of exempt supplies.
- •Epem's financial statements showed turnover exceeding the VAT threshold.
Legal Principles
Exemption of medical care under VAT Directive and UK law.
Article 132(1)(b) and (c) of the VAT Directive (Council Directive 2006/112/EC), Schedule 9, Group 7 of the VAT Act 1994.
Interpretation of 'medical care' requires a therapeutic purpose, diagnosed and treated by a qualified professional; services outside a regulated environment must be demonstrably 'medical care'.
Skatteverket v PFC Clinic AB (Case C-91/12).
The burden of proof lies on the taxable person to demonstrate that their services are exempt.
Not explicitly stated but implied.
Outcomes
Appeal dismissed.
Epem failed to provide sufficient evidence to prove their services were primarily medical care and that the proportion of exempt services was below the VAT threshold. The evidence presented was deemed insufficient to overturn the HMRC decision.
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