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HMRC internal manual

VAT Health

From
HM Revenue & Customs
Updated
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Introduction: The Purpose Test

Following a further ECJ ruling in the case of Dr Peter d’Ambrumenil and Dispute Resolution Services (C-307/01), the exemption for health services provided by registered health professionals became subject to the ‘purpose test’ with effect from 1 May 2007. Essentially, this means that from this date, health services provided by registered health professionals will only be exempt from VAT where their principal purpose is to protect, maintain or restore the health of the individual concerned. This is known as the ‘purpose’ or ‘principal purpose’ test. The impact of this decision on health services provided by registered health professionals is covered in more detail in VATHLT2000.

The case of Ultralase Medical Aesthetics Ltd UKFTT 187 (TC) confirmed that services of cosmetic treatment done purely for aesthetic reasons are standard-rated for VAT purposes.