ADCL, a private medical clinic, challenged HMRC’s VAT liability and lost, resulting in a £1.6 million assessment for failing to register and account for VAT since 2010. HMRC usually exempts cosmetic services if they are part of a health care treatment program, but purely cosmetic services are standard-rated. The VAT legislation requires services to be for the protection, maintenance, or restoration of health, and the recent case of ADCL confirmed that purely cosmetic services do not qualify for VAT exemption. ADCL failed to prove that their services had a therapeutic purpose, leading to the conclusion that their services did not constitute medical care.
Source Baker Tilly