Aesthetic-Doctor.Com Ltd v The Commissioners for HMRC
[2024] UKFTT 48 (TC)
Illuminate Skin Clinics Ltd v The Commissioners for HMRC
23 June 2023
[2023] UKFTT 547 (TC)
First-tier Tribunal
A cosmetic clinic argued its services should be VAT-exempt because a doctor provided them. The judge disagreed, saying the services were mainly for looks, not treating illnesses, so VAT still applies.
Key Facts
- •Illuminate Skin Clinics Ltd (Appellant) provides aesthetic, skincare, and wellness treatments (e.g., fat freezing, thread lifts, fillers).
- •HMRC assessed that the clinic's supplies were standard-rated, not VAT-exempt.
- •The Appellant appealed, arguing that services were provided by a registered medical professional and thus exempt under VAT Act 1994 Schedule 9 Group 7.
- •The clinic's director, Dr. Shotter, is a registered medical practitioner.
- •The appeal focused on Item 1 of Schedule 9 Group 7 (medical care by a registered practitioner), with Item 4 (care in state-regulated institutions) considered a contingent alternative.
- •The clinic was not registered with the CQC (Care Quality Commission) during the period under appeal (12/16).
Legal Principles
Exemptions for medical care under Article 132 of the Principal VAT Directive (PVD) and Item 1 of Schedule 9 Group 7 of the VAT Act 1994 must be interpreted strictly but not restrictively.
Mainpay Ltd v HMRC [2022] EWCA Civ 1620, Kügler C-141/00
'Medical care' means diagnosing, treating, and curing diseases or health disorders; the services must have a therapeutic aim.
Mainpay Ltd v HMRC [2022] EWCA Civ 1620
The economic realities of the transaction determine whether a supply is of medical care; contracts are a useful starting point, but not the end point.
Mainpay Ltd v HMRC [2022] EWCA Civ 1620, Airtours Holiday Transport Ltd v HMRC [2016] UKSC 21
The burden of proof lies with the taxpayer to establish entitlement to exemption.
Expert Witness Institute v Customs and Excise Commissioners [2001] EWCA Civ 1882
Outcomes
Appeal dismissed.
The clinic's services were primarily cosmetic, not medical care. The evidence did not demonstrate a principal purpose of diagnosing, treating, or curing diseases or health disorders. The Appellant failed to meet the burden of proof to establish exemption under Item 1.