VAT exemption for cosmetic surgery?
“The European Court of Justice’s decision yesterday in a case called PFC Clinic will be of great interest to all involved in cosmetic surgery. The case looks at whether the VAT exemption for healthcare applies to cosmetic surgery, and concludes that:
– VAT exemption is intended to apply to surgical procedures which are provided for healthcare reasons, and the decision as to whether a procedure is for healthcare reasons is made by a medical professional (and not with reference to the patient’s understanding)./p>
– So, depending on the medical need or lack of it, it’s possible to do the same operation on two different patients, with one potentially being VAT-exempt (as it was for medical need) and one being subject to VAT (as there was no underlying healthcare need). This would affect what VAT the surgeon/clinic charges and the ability of the surgeon/clinic to recover VAT on costs./p>
As this case was referred to the European Court by the Swedish Courts, it remains to be seen how quickly HMRC will issue guidance on what UK plastic surgeons should do. However, decisions of the ECJ are applicable to all member states, so HMRC cannot ignore it. “/p>
* source: European Court of Justice