VAT Now?
Landmark VAT ruling brings new clarity for medically registered aesthetic practitioners
A significant Upper Tribunal (Tax and Chancery Chamber) decision has shed new light on how VAT should be applied to non-surgical aesthetic treatments carried out by medically registered professionals. The ruling revisits and overturns the earlier First-tier Tribunal (FTT) judgment in Illuminate Skin Clinic v HMRC, offering clearer guidance on when aesthetic interventions may qualify as VAT-exempt “medical care”.
The decision is widely regarded as a defining moment for the medical aesthetics community, setting out more explicit criteria around therapeutic purpose, diagnostic justification and practitioner registration.
Why this decision is important
The Upper Tribunal has drawn a sharper distinction between treatments provided for medical or therapeutic reasons and those performed purely for cosmetic enhancement. For clinicians who may apply VAT exemptions in certain cases, the ruling reinforces the need for:
- A clearly evidenced therapeutic purpose
- A credible clinical diagnosis
- Strong supporting documentation
- Delivery by an appropriately registered medical professional.
Key principles established by the Upper Tribunal
The judgment sets out several important points that will guide future assessments of VAT status in aesthetics:
1. Determining the principal purpose of treatment
The fundamental test is whether the main aim of the procedure is therapeutic. Treatments addressing a diagnosed medical or psychological condition may be classed as medical care; those for aesthetic enhancement alone generally will not.
2. Diagnostic evidence and record-keeping
Clear documentation is essential. Practitioners must be able to demonstrate that the treatment forms part of a genuine course of medical care, supported by a robust diagnosis.
3. Psychological indications require robust proof
Where psychological benefit is presented as the therapeutic justification, the practitioner bears the full burden of proof. Evidence must show both the existence of a psychological condition and how the intervention supports its management.
4. Only medically registered practitioners can claim exemption
Treatments must be carried out by professionals registered with bodies such as the GMC, NMC or GDC, and only within the scope of their registration.
5. A holistic, multi-factor approach
The Tribunal highlighted that VAT classification cannot rely solely on patient motivation. Clinical context, practitioner intention, diagnosis, and procedural details all form part of the assessment.
The Tribunal’s conclusion
In overturning the earlier FTT decision, the Upper Tribunal emphasised:
“The supply must be made by a registered person and must have a therapeutic purpose… Where a supply has both a therapeutic purpose and a cosmetic purpose, it is necessary to identify the principal purpose.”
The ruling also confirmed that established European Court of Justice case law remains influential in how UK authorities interpret “medical care”, ensuring continuity with previous EU principles.
The case will now return to the First-tier Tribunal for reconsideration, but its guidance is already having a wider impact across the sector.
The Joint Council for Cosmetic Practitioners (JCCP) noted that the decision provides “important clarification on the VAT treatment of aesthetic and cosmetic medical procedures”, and is expected to influence compliance expectations and practitioner education in the months ahead.
What practitioners should do now
Medically registered professionals offering non-surgical aesthetic procedures should consider taking the following steps:
- Review diagnostic processes and ensure the therapeutic rationale is documented clearly
- Reassess any treatments where a VAT exemption is applied
- Seek specialist tax advice where classification is unclear
- Maintain a clear distinction between therapeutic and cosmetic services in marketing materials, patient communications and pricing structures.
The ruling provides an opportunity to strengthen governance frameworks and ensure that clinical and financial documentation align with best practice.