In Illuminate Skin Clinics Ltd v HMRC [2023] TC08846, the First Tier Tribunal (FTT) found that supplies of aesthetic, skincare and wellness treatments were standard rated for VAT as they did not constitute medical care. 

  • Illuminate Skin Clinics Ltd (Illuminate) operated a private clinic which offered a range of treatments including fat freezing, thread lifts, chemical peels, fillers, facials, intravenous drips and boosters.
  • Illuminate Registered for VAT in August 2014 and Deregistered in May 2017.
  • Following a visit in February 2019, HMRC issued a decision that supplies made by Illuminate during the VAT period 12/16 were not exempt from VAT.
    • Illuminate’s claim for a VAT repayment was rejected.
    • HMRC raised a Best judgment assessment for underpaid output VAT.
  • Following a Statutory review, which upheld HMRC’s position, Illuminate Appealed to the First Tier Tribunal (FTT).

Item 1, Group 7, of Schedule 9 of the VAT Act 1994 exempts the supply of services consisting of the Provision of medical care by a person on the register of medical practitioners.

It was agreed that Illuminate's sole director and shareholder was on the register of medical practitioners. This meant that the only point in dispute was whether Illuminate’s supplies constituted ‘medical care’.

Referring to the Mainpay v HMRC [2022] EWCA Civ 1620 Court of Appeal decision, the FTT found that:

  • Medical care means diagnosing, treating and, in so far as possible, curing diseases or health disorders.
    • The services must have a therapeutic aim, that they consist of the diagnosis, treatment or cure of disease or ill health.
  • Diagnosis is the starting point of medical care and the backdrop against which medical treatment takes place.
    • Without diagnosis, treatment is not something which is being done responsively to a disease or a health disorder.
  • Illuminate kept documents recording the initial consultation with its clients. These included a ‘diagnosis’ section.
    • These were very cursory documents and could not be described as scientific.
    • None of the diagnoses recorded any recognised health disorder.
  • The treatments given by Illuminate were not being provided for medical purposes but for non-medical, namely cosmetic, purposes.
    • The fact that people went to the clinic feeling unhappy with some aspect of their appearance and may have been happier following a procedure being performed, did not mean that the treatment was medical, or had a therapeutic aim.
    • The services supplied were not those of medical care.

The appeal was dismissed.

Useful guides on this topic

Health and welfare: VAT
When does reduced rating, zero rating and VAT exemption apply to services relating to medical care, health and welfare? What are the rules?

Assessments: Best judgement & time limits
What is a 'best judgement' assessment for VAT? When can HMRC raise one? What are your rights of appeal? How do you displace a best judgement assessment? What are the time limits for a VAT assessment?

Input VAT: What constitutes a valid claim (& VAT invoice)?
What is Input VAT? Who can claim it? What is needed for a valid claim? What needs to be included on a VAT invoice and can you make a claim without one? 

Appeals: VAT
How do I appeal a VAT penalty?  How can I request a Statutory Review? How do I appeal an HMRC decision?   

External link

Illuminate Skin Clinics Ltd v HMRC [2023] TC08846

Small acorn
If you like our content come and join us.

Thousands of accountants and advisers and their clients use as their primary TAX resource.

Register with us now to receive our receive our FREE SME Topical Tax Update & newletter