It looks like a booby trap, Sarge

'I love Botox' bag
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In April this year I went to Melbourne for the wedding of the son of a school friend.  After partially completing my mission of consoling my friend while she lost her only son and gained a daughter I decided we needed a pick-me-up.  So we tootled off to the Barossa valley to visit the wineries.

On day two in the Barossa I developed a stiff neck and debilitating headache.  No, not a hangover, an actual headache. ‘Get me an osteopath’ I groaned.

My friend went into the tourist information office in Tanunda (pop 400).  Resourceful but slightly optimistic I thought, having had experience of tourist information services in the UK.  I was proved wrong as she came back with the goods: Hand to Health Chiropractic, Dr Kylie Salter, 84 Murray Street.  Practically next door to the bookshop I had stumbled into to divert myself with the latest Nordic Noir.

One crick and I was mended.

‘What has this got to do with tax?’ I hear you asking.  Well nothing… but I have now kept my promise to the excellent Dr Salter and mentioned her in these dispatches.

With a link worthy of Alan Titchmarsh on daytime TV I will get to the (tax) point.

I have just read that HMRC have decided to tax what is, scarily enough, fast becoming one of the UK’s favourite pastimes: cosmetic surgery.

It seems that what happened was that HMRC redrafted its public notice  intended for health professionals and sent that redraft to the British Association of Aesthetic Plastic Surgeons (BAAPS) for their comments.  The redrafted text made it clear that HMRC’s view was that while cosmetic procedures carried out for therapeutic purposes were exempt from VAT (when carried out by or under the supervision of ‘health professionals’ or when carried out in a hospital), any other procedure was liable to VAT at the standard rate of 20%.

BAAPS felt that this amounted to HMRC proposing to change their interpretation of the law as to date VAT has been charged only on non-surgical cosmetic procedures.

Having first denied that they were changing anything, it seems that this has now been filed in the ‘too difficult’ drawer by HMRC and the proposed amendments to the public notice have been shelved.  But where does this leave matters?

The relevant UK law refers to the provision of medical care or surgical treatment as exempt from VAT.  There is no test of purpose.  Call me old-fashioned but last time I looked the law was as enacted by Parliament.

Hej hej.


*** UPDATE – April 2013***

In Skatteverket v PFC Clinic AB PFC operated a clinic which provided plastic surgery and cosmetic treatments, such as breast augmentation and reduction, and it reclaimed input tax relating to these supplies. The Swedish tax authority rejected the claim on the basis that PFC was making exempt supplies of medical care. PFC appealed, and the case was referred to the European Court for a ruling on whether the services were exempt as supplies of medical care falling within article 132 of Directive 2006/112/EC.

In March 2013 the European Court ruled that PFC’s services could be medical care only where the services were intended to diagnose, treat or cure diseases or health disorders or to protect, maintain or restore human health. Where the surgery was for purely cosmetic reasons it did not qualify for exemption.

The European Court was also of the view that the subjective understanding that the person who undergoes plastic surgery or a cosmetic treatment has of it was not decisive  in determining whether that intervention has a therapeutic purpose.

Time to get down off that fence, HMRC?

Or are you too worried that, if you do, you might need a  nose job?

Tax lawyer specialising in business tax, SDLT and VAT

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