The subject of value-added tax (VAT) is a long-standing complex and contentious issue within the field of aesthetic medicine. It is neither reasonable or rational for HMRC to continue to adopt such a restrictive and discriminatory view towards an important branch of modern-day medicine. As healthcare professionals, we must be prepared to defend our specialty and ensure that the healthcare services we are providing to our patients fall within the exemption criteria, in consonance with other branches of medicine. I am no expert on the subject of VAT and I would always strongly advocate that practitioners seek the advice of a VAT specialist, but I am an expert in the delivery of medical aesthetic healthcare, and I challenge the belief that the work that we do is anything less than true medicine. For most ethically-sound practitioners, it is rare to see a patient who requires medical aesthetic intervention for purely cosmetic purposes.
Not all healthcare services carried out by a registered healthcare professional will be automatically exempt from the payment of VAT. However, exemption does apply when the service provided is primarily intended to protect, maintain or restore the health of an individual. Moreover, services not aimed at the prevention, diagnosis, treatment or cure of a disease or health disorder are subject to the payment of VAT. Treatments that are intended for purely cosmetic reasons are subject to the payment of VAT. However, HMRC will usually accept that cosmetic services are exempt when the treatments are carried out as a part of a programme of healthcare. To meet the criteria for VAT exemption within the field of aesthetic medicine, the following two criteria must be met:
Furthermore, HMRC has stated that medical aesthetic treatments should be carried out for therapeutic purposes in response to the diagnosis of a medical condition. Preventative medicine does fall within the VAT exemption criteria, but it is a requirement that the treatment prescribed is closely linked to a diagnosis of a condition.
The purpose of this month's column is to determine whether registered HCPs working within the field of Aesthetic medicine meet the two tests for VAT exemption and to explore whether we can provide sufficient proof to defend our stance on this issue.
I recently engaged in a conversation with an esteemed colleague, who is a medical doctor specialising in dermatology and practising within the field of aesthetic medicine. My colleague stated that surely the injection of dermal filler was for ‘purely cosmetic’ reasons, and therefore subject to the payment of VAT. I challenged this viewpoint.
There is no disputing the fact that aging is a harmful abnormality of bodily structure and function. Traditionally, ageing was viewed as a natural process. I strongly believe that biological aging should be classified as a disease. Photoaging is the accelerated deterioration of the skin as a result of exposure to UV rays during a lifetime; it is considered by dermatologists as a condition leading to pathology (Rabe et al 2006). Solar radiation damage to the skin can have a catastrophic outcome.
‘Therapeutic purposes’ is a term that appears not to be rigidly interpreted or enforced by HMRC; it is a term that refers to treatments that are concerned with the healing of a disease. It is my belief that aging is a disease process and that aesthetic medical treatments are carried out for therapeutic purposes in our quest to protect, maintain or restore the health of the individual who presents with signs and symptoms of an organ in decline (in most cases in aesthetics, the skin) and other multifactorial changes in human tissues that have a negative impact on the patient's wellbeing.
The healthcare professional specialising in the field of aesthetic medicine will assess skin health as the fundamental basis of the development of a programme of healthcare. After assessment of skin health, a diagnosis can be formulated and appropriate treatment prescribed as necessary. The goal of treatment is of course to protect the skin from further harm and deterioration and to restore and maintain skin function and health.
The injection of dermal filler is a medical treatment typically carried out in response to multi factorial age-related changes to the face. The examination of the face will incorporate assessment of collagen and elastin depletion, soft tissue atrophy, fat pad displacement and structural bony changes, including bone resorption. The decision to inject a dermal filler is in response to these abnormalities of facial structure; the primary purposes of the services provided are to protect the patient from further deterioration and to restore and maintain facial structure (restorative and regenerative medicine).
This is a basic example of facial assessment pre-dermal filler treatment; however, each patient is a unique individual and assessment of needs can be much more complex and challenging. Moreover, this brief description demonstrates that the healthcare professional specialising in the field of aesthetic medicine does meet the requirements specified for VAT exemption, and sufficient proof is evidenced through our documentation of the patient journey and treatment pathway.
The process of assessment, analysis, diagnosis and treatment planning can be equally utilised for botulinum toxin injections. It is hoped that, as a prescription-only medication, there is less of a challenge with regard to the medical nature of the treatment. Botulinum toxin injections are administered to reduce the appearance of both static and dynamic rhytides of the upper face (scarring) and to slow down the process of further rhytide development by the reduction in muscle activity. The treatment is primarily focused on improving the appearance of the skin, but also has an element of preventative medicine.
Healthcare professionals must always have a clinical indication for performing a medical aesthetic treatment. This indication may be physical, psychological or a combination of the two. Healthcare professionals should not be treating patients simply because they have requested a treatment. Healthcare professionals who choose to perform medical aesthetic treatments in the absence of a clinical indication may be challenged by HMRC. Furthermore, those who have a business model that incorporates beauty treatments within their practice will likely be subject to payment of VAT. Healthcare professionals who meet the two criteria discussed in this column should be exempt from the payment of VAT.
If registered HCPs provide the sole service of medical aesthetic care within their clinic environment, then it is very difficult to challenge that the two tests required for exemption of VAT are not being met. Non medics/lay people who practice within the field of aesthetic medicine will without a doubt fail to meet the requirements for exemption and must pay VAT on the services they provide (if above the VAT threshold); however, of course, they should not be practising within a field of medicine at all.
It may be argued that if the government can successfully demedicalise the field of aesthetic medicine, all treatments will become subject to the payment of VAT. This would be a major financial coup for the government but an absolute travesty to an important branch of modern-day healthcare.