Is Botox treatment a mental health issue?
One of my clients is partially exempt for VAT purposes, carrying out a wide range of surgical and cosmetic treatments for wealthy patients.
During a recent discussion about his year-end accounts, he said that he does not charge VAT on Botox treatments if he gets a letter from the patient signed by a mental health specialist to say that the individual person has either depression or anxiety issues; the Botox treatment can then be justified as a procedure to ‘improve’ mental health rather than a cosmetic treatment.
This argument does not seem correct, although the focus on mental health issues in recent years does make my client’s argument seem logical. To extend on this issue, would the treatments also qualify as exempt if the patients self-certify that they have attention deficit hyperactivity disorder (ADHD), which apparently, affects over two million people in the UK?
Readers’ thoughts would be appreciated because there is a lot of VAT involved here and HMRC would presumably issue a retrospective assessment if it disagreed with my client’s approach.
Query 20,595– Adams.
Are there tax-efficient ways to encourage bicycle use?
As the traffic in the city where I undertake most of the firm’s business has increased substantially in recent years, several of my clients have recently mentioned the idea of encouraging their employees to cycle to work.
This is not something I have given much thought to in the past and I wonder whether readers are able to advise on the most tax-efficient ways that employers could help. I am aware that there is a cycle-to-work scheme but have never advised on this. Do employers have to adopt this arrangement or are there less formal means that could be used? I did wonder whether employers could simply buy a fleet of bicycles that are available to employees for their commuting and private use. But would this result in a liability to income tax and National Insurance?
Do all employees have to be offered a bicycle and could employers encourage take-up in other ways without incurring liabilities? For example, could those cycling to work be offered a free breakfast and shower facility?
I would welcome advice here on what approach would work best for the small and medium-sized businesses that I act for.
Query 20,596– Cyclist.
A neat solution or too good to be true?
I act for a large private company that has been family owned for many years – probably going back to the 1930s. It has operated from a very substantial detached house (think small stately home), which has been owned by the company since day one.
The company has decided that it is time to move operations to a smaller, purpose-built office, and the managing director is considering moving into the property as somewhere to live (he will still keep his existing residence).
Given that the current property must be worth several million pounds, this would appear to create a massive benefit in kind. But in the 1930s the average price for a house was £600, so it is very likely that this property cost less than £75,000 when it was first purchased.
If this is the case, does it mean that the benefit in kind would be based only on the annual value and that an additional charge for ‘expensive’ properties would not apply?
Does that also mean that any enhancement expenditure can be ignored? ITEPA 2003, s 107 seems only to apply to property costing more than £75,000?
What do readers think?
Query 20,597 – Builder.
Can the taxpayer take HMRC’s silence as an answer?
A client’s husband has asked my opinion about an area I don’t usually deal with.
In his capacity as his late mother’s executor, he wrote to HMRC in December 2024 to say that he estimated the estate owed capital gains tax of £4,000 in relation to the administration period.
He has heard nothing back. He is holding the funds rather than distributing them to the residuary beneficiaries.
His question – which I could not answer – was, at what point did the absence of a reply mean that the estate could keep the money (and he could distribute it)?
My question is whether, having written to HMRC to disclose the liability, does he have any responsibility to pursue it for an answer? HMRC’s delays are a constant source of frustration, particularly if one is trying to give the department money.
Readers’ views would be welcome.
Query 20,598– Deaf Ear.
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