Main Category: Cosmetic Medicine / Plastic Surgery
Article Date: 17 Oct 2011 - 2:00 PDT
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opinions � After new VAT guidelines were introduced the cost of cosmetic surgery will rise by 20% in the United Kingdom. Surgeons who carry out plastic surgery purely for cosmetic reasons will need to register for VAT (Value Added Tax) and add that amount onto the patient's bill.
VAT is similar to the US Sales Tax.
According to HMRC (HM Revenue and Customs), this is not a new law, but rather a clarification regarding existing laws, and that relevant trade professionals have received the new guidance.
Those in the cosmetics industry, who are calling this "The boob tax", say this move should mean an additional �500 million ($780 million) in government revenue. The UK government, like many others in Europe, is forever seeking out ways of reducing its deficit.
To date, VAT has been added only onto Botox injections, chemical peels and other minor treatments performed in beauty salons.
A breast enhancement operation will rise by approximately �1,000 ($1,600).
If the cosmetic procedure is for therapeutic reasons, the VAT can be exempt, UK authorities said.
UK authorities wrote:
". . . cosmetic services which are performed mainly for beautification or rejuvenation purposes, or done out of the individual's free choice rather than out of medical necessity, are liable to VAT at the standard rate. Such services may include: face lifts, tummy tucks, female breast enlargement, liposuction, hair and tattoo removal using lasers and intense pulse light source machines."
The guidance adds that people will not be eligible for exemption from VAT if the sole aim of the surgery is to make the individual feel better about themselves.
British Association of Aesthetic Plastic Surgeons (BAAPS) president, Fazel Fatah, said:
"The subjective proposals being put forward by HMRC will potentially harm large numbers of patients. They imply that, by definition, any procedure that corrects appearance rather than function is not a medical need. There has been no meaningful discussion with the professional bodies involved.We can only hope that common ground can be found that protects the wellbeing of patients while balancing the obvious need to increase tax revenues. With surgery, we are dealing with human lives."
UK plastic surgeons are already commenting on the difficulty, in some cases, in determining whether a plastic surgical procedure can be classed as therapeutic. If a woman's breasts are not symmetrical, at what severity of asymmetry would they be exempt from VAT? What about the correction of prominent ears? In the UK the National Health Service (NHS) covers the cost for children so that they won't be bullied or teased at school.
Plastic surgery and cosmetic surgery
Plastic surgery is divided into two parts:- Cosmetic surgery - in this case the appearance was basically normal to start with. For example, a 60-year-old patient may want a face lift to look younger. Before the procedure, his/her face looked basically normal.
- Reconstructive surgery - the body parts are not within the range of normal appearance before surgery - the surgeon's aim is to make it look more normal. Examples include repairing a cleft lip, fixing a nose that has been broken, or reshaping breasts after breast cancer surgery.
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Christian Nordqvist. "Cosmetic Surgery To Have VAT Added On In UK." Medical News Today. MediLexicon, Intl., 17 Oct. 2011. Web.
24 Oct. 2011. <http://www.medicalnewstoday.com/articles/236077.php>
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VAT and Cosmetic Surgery
posted by Eamon McNicholas, Tax Barrister on 17 Oct 2011 at 3:23 amReports that HMRC are talking, again, about VAT on cosmetic surgery.
This is a technically complex part of VAT governed ultimately by European law, which domestic law then implements in the UK. So it is not as simple as HMRC just being free to change what it wants.
Instead the problem is interpreting and applying European law. This makes medical procedures, by registered professionals, exempt or VAT free. But a lot depends on the purpose of the procedure, so not everything done by a medical professional is automatically exempt. Likewise not all elective surgery is automatically taxable.
Some people criticise plastic surgery as frivolous and not really medically essential, but this is often based on a subjective opinion. But to the patients the medical benefits, psychological and physical, are objectively very real.
This could raise all sorts of practical and ethical problems. What to do if the VAT status, and hence cost, of a medical procedure had to be decided by whether HMRC claimed the procedure a taxable luxury while the patient considered it vital ?
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