UK Mulls VAT On Cosmetic Surgery

by Robert Lee, Tax-News.com, London

20 October 2011

Cosmetic surgery procedures in the UK may soon be subject to value-added tax (VAT), potentially raising the cost of operations by 20%.

Reports suggest that updated guidance issued by HM Revenue and Customs (HMRC) on the taxation of medical procedures outlines plans to compel doctors offering such procedures as liposuction, face lifts and breast operations, to register for VAT.

The provision of health-related services is generally excluded from VAT in the UK, which from January 4, 2011 is charged at a standard rate of 20%. However, HMRC says in the guidance note that it does not regard the improvement cosmetic surgery may give to a patient's confidence as a sufficient reason to make procedures exempt.

Commenting, Fazel Fatah, president of the British Association of Aesthetic Plastic Surgeons called the proposals "subjective" and said that it is hoped that "common ground can be found that protects the wellbeing of patients by balancing the obvious need to increase tax revenues".

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