As most of you know, medical treatments and health services are exempt from VAT, meaning those offering them do not have to pay tax on their supply.1 There is, however, often confusion over whether aesthetic treatments can be considered medical and are thus exempt from tax. The most common misconception I come across in my work is that there is some magical trick to making aesthetic supplies exempt from VAT, which involves a form of VAT planning. There is no magic, nor is there VAT planning; just a simple test against the services you already deliver to establish what you are actually doing on a day-to-day basis and whether your services are exempt from VAT.
The test comprises two parts, detailed below, both of which need to be met. If you fail one or both then the treatment is considered cosmetic for VAT purposes and subject to VAT.
If your cosmetic turnover, along with any other taxable supplies, exceeds the VAT registration threshold in any 12-month rolling period, then you are required to register for VAT and pay tax on those…
