Hamilton Fraser Talks With Veronica Donnelly About VAT in the Aesthetics Sector

In an interview with Hamilton Fraser ahead of her talk at the Aesthetics Business Conference on Tuesday 8 October 2024, Veronica Donnelly provided insights into the complex world of VAT in the aesthetics sector. As a VAT advisor for over 30 years and partner at Azets, Veronica has vast experience advising aesthetic businesses on how to navigate VAT regulations.

Understanding VAT and medical exemptions

Veronica’s session will focus on the intricacies of VAT as they apply to aesthetic treatments, particularly the tests applied by HMRC and tribunals that determine whether VAT exemption can be granted for medical procedures. "There’s a lot of misinformation circulating about tribunal cases in this space," she explained. "It’s important to understand that the law has remained largely unchanged since 1973, but interpretations of ‘medical care’ are increasingly being contested."

Clarifying VAT exemptions

Veronica highlighted that many aesthetic practitioners are confused about what qualifies as VAT-exempt medical care versus cosmetic treatments subject to VAT. "It should be a simple binary test – are you regulated, and are you providing medical care?" However, she noted that the lack of a clear legal definition for 'medical care' has led to ambiguity and misinterpretation. Veronica’s talk at the Aesthetics Business Conference will offer practical advice on keeping detailed records to prove medical purpose and reduce VAT risk.

The impact of ongoing tribunal cases

During the interview, Veronica discussed two key tribunal cases currently being appealed, which could set important precedents for the sector. "These cases will clarify whether a treatment is considered cosmetic or medical, and the decisions will apply across the industry," she explained. This development will significantly affect how aesthetic businesses approach VAT exemption in the future.

Advice for aesthetic businesses

When asked what advice she would give to aesthetics businesses, Veronica emphasised the importance of accurate record-keeping. "You need to ensure your records justify any VAT exemptions claimed. Simply stating that a treatment has a medical purpose isn’t enough – you need evidence," she advised. This practical guidance will be a key takeaway from her talk at the Aesthetics Business Conference.

With the Aesthetics Business Conference 2024 less than a week away, Veronica Donnelly’s session will provide essential insights for practitioners looking to navigate VAT regulations and minimise risk.

Veronica Donnelly will be speaking at the Aesthetics Business Conference, presented by Hamilton Fraser, on VAT in the aesthetics sector from 10:20 to 10:45. For more information, visit Hamilton Fraser’s website.

For detailed advice on this topic read, ‘A comprehensive guide to finance, tax, and VAT in aesthetics’ and ‘VAT in aesthetics: The ultimate guide’. You can also read the full interview with Veronica, ‘Insights on VAT in the aesthetic sector: A conversation with Veronica Donnelly’.