Medical Aesthetics VAT on Cosmetic Treatments

Should medical aesthetics clinics be VAT registered?
There has been a lot of concern from medical professionals who run a private practice on the issue of charging VAT on the treatments provided.

Medical aesthetics clinics which have a turn over of £67,000 (the VAT registration threshold) are in a dilemma.

Do you become a VAT registered company?

In most business's this would be the case and they would be required to registered and pay VAT (20% from 4th jan 2010) on their turn over quarterly.

Medical practices, treatments and prescriptions for medicines do not require VAT registration as these services and products are VAT exempt. This place medical aesthetics clinics in a very grey area, are they medical which is VAT exempt or are they aesthetic, cosmetic which would require VAT registration and the clinic would have to absorb the VAT or charge this additional to the patients.

Some clinics identify if the patient requires the treatment for medical or cosmetic reasons to reduce the VAT this may or may not be a solution. Until the HMRC have a clear classification for medical aesthetics practices this will always be a difficult one to answer.

You always discuss your VAT or tax questions with a qualified accountant.

Let me know your thoughts and experiences with this.