How do HMRC target the growing Botox industry – HMRC draw up the lines of Enquiry

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How would HMRC have selected your case for enquiry?

HMRC screen business accounts when submitted to them and select many on the basis of:-

  • Turnover falling just below the VAT threshold of £85,000
  • Turnover not matching their VAT returns, if filed
  • Nature of the trade, in various specialist projects into whole UK or regional trade sectors – often called ‘campaigns’, such as one into cosmetic practices across the UK.
  • Information received from anonymous sources like your competitors, an online or social media presence, articles in the papers or other press, planning applications for change of use or new premises, information gathered from your landlords, national minimum wage concerns into salons, Status enquiries emanating from payments made to self- employed ( off payroll ) individuals ( often ‘renting’ a chair), large or exceptional claims made in the profit and loss account or low drawings or directors remuneration ( which could indicate off-record, diverted cash being received).

So once they have a foot in the door they can now rely on the outcome of the above case where HMRC originally concluded that Botox treatments could not be exempt from VAT as they did not consider them to be “medical” treatment –  and on appeal, the judge made her decision which hung on the lack evidence that any of the firm’s actual patients received cosmetic procedures to treat any ‘diagnosed’ medical conditions. She concluded that the treatments were primarily for cosmetic reasons.  Therefore, they were not exempt from VAT.

Read the full vat-on-botox-and-aesthetic-treatments-keep-a-stiff-upper-lip Article here

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