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Readers' forum : Cosmetic makeover

04 July 2017
Issue: 4606 / Categories: Forum & Feedback

The benefits of a VAT group for a cosmetic services business.

I act for a limited company client which has raised £1m of share capital. It will invest all of this money in a subsidiary company that will carry out cosmetic surgery for wealthy patients at an exclusive site in London. My questions relate to VAT as follows.

Do readers have any thoughts about the VAT liability of the surgery? I suspect that some procedures could qualify as VAT-exempt under the health care section of the legislation. But much of it will be subject to VAT and be carried out for improved personal appearance rather than medical benefits. Is there any useful case law on this issue? The profit share of the parent company will be extracted by making an annual management charge to the subsidiary. So would a VAT group be beneficial?

Query 19 003– Botoxer.


Reply by  Melanie Lord AVS VAT

HMRC will generally regard...

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