Upper Tribunal Tax and Chancery Chamber

UT/2023/000122 - [2025] UKUT 00341 (TCC)

Fecha: 06-Jun-2025

Introduction

Introduction

This appeal concerns an important and difficult point. If a registered medical practitioner provides a treatment or intervention that has an aesthetic purpose or effect, under what circumstances might this supply fall within the exemption from VAT for medical care.

The appeal is against a decision of the First-tier Tribunal Tax Chamber (“the FTT”) released on 23 June 2023 (“the Decision”). The FTT dismissed the appeal of Illuminate Skin Clinics Limited (“the Appellant”) against a decision of HM Revenue & Customs to refuse repayment of VAT and against an assessment to VAT. The Appellant runs a private clinic offering a range of aesthetic, skincare and wellness treatments, including treatments for collagen loss, excess fat, Botox and dermal fillers. The issue before the FTT was whether the Appellant was supplying medical care such that its supplies were exempt from VAT. The appeal concerns VAT period 12/16.

The exemption for medical care derives from Articles 131 and 132 Principal VAT Directive (2006/112/EC) (“the PVD”), which read as follows:

“Article 131
The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.
Article 132
l.
Member States shall exempt the following transactions:
…
(b)
hospital and medical care and closely related activities undertaken by bodies governed by public law or, under social conditions comparable with those applicable to bodies governed by public law, by hospitals, centres for medical treatment or diagnosis and other duly recognised establishments of a similar nature;
(c)
the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;”

These provisions were implemented into UK law by Item 1 Group 7 Schedule 9 Value Added Tax Act 1994 (“VATA 1994”) in the following terms:

Item 1 Group 7 Schedule 9

“The supply of services consisting in the provision of medical care by a person registered or enrolled in any of the following —

(a)

the register of medical practitioners;

(b)

either of the registers of ophthalmic opticians or the register of dispensing opticians kept under the Opticians Act 1989 or either of the lists kept under section 9 of that Act of bodies corporate carrying on business as ophthalmic opticians or as dispensing opticians;

(c)

the register kept under the Health Professions Order 2001;

(ca) the register of osteopaths maintained in accordance with the provisions of the Osteopaths Act 1993;

(cb) the register of chiropractors maintained in accordance with the provisions of the Chiropractors Act 1994;

(d)

the register of qualified nurses, midwives and nursing associates maintained under article 5 of the Nursing and Midwifery Order 2001.”

The Appellant’s services were provided by Dr Sophie Shotter, who is a qualified doctor and registered with the General Medical Council. The issue before the FTT was whether the Appellant’s services consisted in the provision of medical care. The FTT concluded that the services did not consist in the provision of medical care and the appeal was dismissed.

The Appellant contends on this appeal that the FTT erred in law in reaching that conclusion. In very broad terms at this stage, the issues concern the test for identifying supplies of medical care and whether the FTT correctly applied that test.

We understand that this is a lead case with a number of cases stayed pending its outcome. It is also hoped that the decision in this appeal will provide guidance for other businesses in this sector.

We are grateful to all counsel, and to the parties’ wider legal teams for the quality of their submissions and their constructive approach to the appeal.