The VAT implications of facial aesthetics

It is crucial that practices and associates correctly differentiate between exempt and standard rated treatments for VAT implications

12 February, 2024 / featured
Samantha Turkington, in association with EQ Accountants

A practitioner provides a facial aesthetics treatment to a patient.

In recent years, there has been an increase in dental practices and associates diversifying their business to include facial aesthetics.

While offering these procedures can help boost sales and your client base, it also requires careful consideration. It can get particularly confusing as to whether the aesthetic treatments you offer will qualify for VAT exemption or not, and it is a potentially costly mistake you want to avoid.

While dental treatments carried out by a qualified medical professional are exempt from VAT, facial aesthetic treatments (such as anti-wrinkle injections, fillers and skin treatments) are standard rated, with 20 per cent VAT charged. As such, it is crucial that practices and associates correctly differentiate between the two and keep accurate records.

The VAT registration threshold set by HMRC is currently £85,000 for a 12-month rolling period, not your financial year, but this limit excludes income which is VAT-exempt. Therefore, it is essential for dentists to keep accurate monthly records of your total sales showing how their income is split. If the threshold is breached, VAT returns will need to be completed and filed.

Confusion can also arise when aesthetic treatments are performed for a medical purpose. If the treatment is performed as part of protecting, restoring or maintaining health, it is VAT-exempt. This should be documented detailing the medical necessity, should this later need to be relied upon.

Due to the rise of aesthetic treatments, it is an area which is drawing the attention of HMRC. Our EQ Dental team has experience in this specialist area if you are unsure of your tax position.