VAT and Aesthetic Treatments: What the Illuminate Skin Clinics Ruling Means for Your Aesthetics Business
A recent decision from the Upper Tribunal — Illuminate Skin Clinics Ltd v HMRC [2025] UKUT 00341 (TCC) — has brought VAT in aesthetics into focus.
The ruling doesn’t change the law but sharpens how it’s applied, and it’s a timely reminder that even medically delivered treatments aren’t automatically VAT-exempt.
So when do aesthetic treatments count as “medical care” for VAT purposes?
Here’s what every clinic owner and practitioner needs to know.
The Heart of the Issue: Purpose, Not Profession
The Tribunal made one thing very clear - being a doctor, nurse, or CQC-registered clinic does not automatically make your treatments VAT-exempt.
To qualify for exemption, a treatment must have a therapeutic purpose — meaning its main aim is to diagnose, treat, or prevent a disease or health disorder. If the principal reason is cosmetic enhancement, VAT still applies, no matter who provides the service.
What Happened in the Illuminate Case
Like many clinics in the UK, Dr Sophie Shotter’s Illuminate Skin Clinics offered Botox, dermal fillers, and fat-reduction injections. The clinic applied for a VAT refund, arguing that these treatments were exempt because they were delivered by a doctor and involved patient consultations. This practice is not uncommon.
HMRC disagreed, and the First-tier Tribunal (FTT) sided with HMRC, finding the services were not medical care. Illuminate challenged this finding and appealed to the Upper Tribunal.
What the Upper Tribunal Decided
The correct legal test – Rejected
The Tribunal confirmed that the right question is whether the principal purpose of each treatment is therapeutic - relating to the healing of disease, not whether it’s “purely cosmetic.”
Therapeutic vs cosmetic purpose – Rejected
The FTT had correctly focused on purpose, so this argument was rejected.
Definition of “medical care” – Allowed
Here, the Tribunal found fault. The FTT had set the bar too high, ignoring consultation notes and evidence of diagnoses. The Upper Tribunal said these records should have been considered.
EU law and legislative intent – Rejected
The Tribunal found no error; UK VAT rules were properly applied.
Because of that error on the third point, the decision was sent back to the FTT to reconsider each treatment in detail.
Why This Matters for Your Clinic
This case reinforces a key message for aesthetic professionals:
It’s not about what you do — it’s about why you do it, and how you evidence it.
The Tribunal signalled that future assessments will look at several factors:
Whether a diagnosis was made
The patient’s symptoms and motivations
The practitioner’s intent
How clearly the therapeutic purpose is recorded
If the treatment is genuinely addressing a medical or psychological condition — such as hyperhidrosis, migraines, or body dysmorphia — detailed records could support a VAT exemption. But if the treatment is primarily for appearance enhancement, VAT should be charged.
Practical Steps for Practitioners
Document thoroughly. Record medical histories, symptoms, diagnoses, and treatment rationales clearly. Shortcuts won’t help if you’re ever investigated - simply adding ICO codes to notes or patient’s ticking a box to say their appearance negatively impacts their wellbeing is not sufficient evidence!
Diagnose the medical condition. Document how the treatment will treat, or prevent a disease or health disorder.
Be specific about purpose. If a treatment has a therapeutic aim, state it explicitly in the notes.
Know your numbers. If your taxable turnover exceeds £90,000 in any rolling 12-month period, you must register for VAT. You need to understand your margins per treatment you offer to ensure you can price your treatments appropriately to pay the VAT component, remain competitive and make a profit.
What’s Next?
The case is heading back to the First-tier Tribunal. This will hopefully lead to a clarification on what evidence is needed to prove “medical care”. Its outcome could shape future VAT assessments across the aesthetics industry — especially for clinics offering mixed medical and cosmetic services.
Until then, the takeaway is simple:
Medical qualifications and a consultation alone don’t grant VAT exemption.
Where a treatment has both a therapeutic AND cosmetic purpose, it is important to identify the principle purpose, and thoroughly document the symptoms, motivations and diagnosis of the patient.