When are cosmetic treatments exempt from VAT?
Glyn Edwards · Posted on: October 24th 2025 · read
What is medical care and do cosmetic treatments fit into the VAT meaning of the phrase?
This is a vitally important question because ‘medical care’ is VAT exempt when provided by registered medical practitioners, or in hospitals and other state regulated health settings. In the VAT world, medical care means treatments and procedures which have the aim of protecting, maintaining or restoring the health of an individual.
After frequent success in the First-tier Tribunal, HMRC could be forgiven for thinking that the application of VAT to cosmetic treatments was securely established. However, a recent judgement of the Upper Tribunal in Illuminate Skin Clinics Limited v HMRC (UT/2023/000122) gives clinics and medical professionals some ground for optimism, or at least clarity on the hurdles to overcome to demonstrate when cosmetic treatments can amount to VAT-exempt medical care.
We’ve previously highlighted HMRC’s successes, including the following:
Illuminate is led by a registered medical practitioner and offers “an extensive range of treatments for the skin, face and body” according to the clinic’s website.
In the First-tier Tribunal the Judge found that against the taxpayer on the grounds that: patients were not diagnosed with a health disorder or disease; there was no referral from a doctor or other medical practitioner; and no detailed notes showing evidence of healthcare or a treatment plan.
Addressing the argument that cosmetic treatments helped with patient’s mental health, the Tribunal found that ‘helping someone to achieve goals in relation to their appearance - which is what this clinic does - is not treating someone's mental health status, but is going to their self-esteem and self-confidence’.
However, the Upper Tribunal was less dismissive and found that the earlier judgement had given insufficient regard to the professional opinion of the medical professional who led the clinic and performed the treatments. Even where patients self-refer with the idea that they want to improve their appearance, this doesn’t trump a medical opinion that they have a health condition which would benefit from treatment.
Although in Illuminate’s case the doctor’s notes were cursory, there was evidence within them of medical conditions which were diagnosed such as: collagen loss; excess fat; atrophic scarring; verrucae; filamestous wart; tension headaches; solar elestosis; facial asymmetry; skin excess and volume loss.
The latest judgement does confirm that medical care must be the principal purpose of an intervention but it gives greater weight to the opinion of medical professionals in deciding why a treatment is required.
That will be in the context of a multi-factorial analysis which will include:
- any diagnosis made by the medical practitioner making the supply
- the nature of the disease or medical disorder which has been diagnosed;
- the symptoms exhibited by the client;
- the intrinsic nature of the procedure;
- the circumstances in which the client consulted the medical practitioner, including the context in which the supply is made and how the supply is marketed;
- the client’s understanding as to the aim of the procedure; and
- the medical practitioner’s understanding as to the aim of the procedure, including any prophylactic aim.
This doesn’t mean that Illuminate has succeeded in their appeal – the case has been referred back to the First-tier to reconsider the evidence. It is a good steer however to clinicians about the factors they should consider and record in patient notes before deciding on whether a procedure is predominantly medical care and VAT exempt; or really mainly a cosmetic beauty treatment liable to VAT.
If your clinic provides cosmetic or aesthetic treatments and you’re unsure how VAT applies, now is the time to review your procedures, documentation, and marketing materials, our VAT team can help assess your position and help reduce the risk of a successful HMRC challenge, while maximising any available exemptions.
