Illuminate Skin Clinics VAT Case: What Every Aesthetic Clinic Needs to Know

A Landmark Decision for the Cosmetic and Aesthetic Industry

In a ruling that’s shaking up the UK aesthetics sector, Illuminate Skin Clinics Ltd — led by Dr Sophie Shotter — has found itself at the centre of a major VAT dispute with HM Revenue & Customs (HMRC).

At stake: whether the clinic’s aesthetic and wellness treatments should be VAT-exempt as medical care, or standard-rated as cosmetic services.

The case has become a touchstone for how VAT applies to medical aesthetics — and it’s one every clinic owner should understand.

The Background

Illuminate Skin Clinics offered a wide range of treatments including:
💉 Botox and dermal fillers
🧊 Fat freezing
🌿 IV vitamin drips
✨ Skin rejuvenation and wellness therapies

The clinic argued that these treatments were provided by a registered medical practitioner and, in many cases, addressed genuine health or emotional wellbeing concerns.

HMRC, however, disagreed. It claimed that the majority of Illuminate’s work was cosmetic — intended to improve appearance rather than diagnose or treat disease — and therefore subject to VAT at 20%.

What the Tribunal Said

In the 2023 First-Tier Tribunal (FTT) decision (Illuminate Skin Clinics Ltd v HMRC [2023] UKFTT 547), the judges sided with HMRC.

The key reasons were:

1. No diagnosis or disease treatment – Clients usually sought treatments to enhance appearance, not because of a medical condition.
2. Insufficient medical evidence – The clinic’s notes didn’t show a therapeutic purpose or treatment plan.
3. Emotional benefit isn’t enough – Boosted confidence or self-esteem doesn’t make a procedure “medical care” in the VAT sense.
4. Being a doctor ≠ automatic exemption – The court stressed that the nature and purpose of the service matters, not just the practitioner’s qualification.

The result? Illuminate’s claim for VAT exemption was denied, and HMRC’s tax assessment stood.

A Twist: The Upper Tribunal Appeal (2025)

In 2025, the story took a turn. Illuminate appealed to the Upper Tribunal, arguing that the FTT’s interpretation of “therapeutic purpose” was too narrow.

The Upper Tribunal agreed in part, suggesting that some aesthetic or wellness treatments might qualify as medical if they can be shown to have a genuine therapeutic aim — particularly where mental or psychological health is part of the diagnosis or care plan.

This development means the law is still evolving — and more cases are likely to follow.

What This Means for Clinics

This case has implications far beyond one business. It affects every aesthetic, skin, and wellness clinic offering services that blur the line between beauty and medicine.

Here’s what to take away:

1. Review Your Treatments

Go through your treatment list. Ask: is this primarily cosmetic or therapeutic? If it’s about appearance alone, VAT likely applies.

2. Strengthen Medical Records

Keep detailed notes, including:

• Patient history and diagnosis
• Treatment rationale and medical objectives
• Follow-up plans or referrals

3. Market Responsibly

Avoid claiming “medical benefits” unless you can back them up clinically. Marketing language can influence HMRC’s interpretation.

4. Don’t Rely on Registration Alone

Being a doctor or nurse doesn’t guarantee VAT exemption. The purpose of the treatment — not the title — determines liability.

5. Seek Specialist VAT Advice

If you’re unsure, consult a tax professional who understands healthcare VAT. Mistakes can lead to backdated assessments and penalties.

Key Lesson

The Illuminate case draws a bright line in UK VAT law:

“If you can’t prove it’s medical, HMRC will assume it’s cosmetic.”

Even treatments that genuinely help patients feel better must show documented therapeutic purpose to qualify for VAT exemption.

The Bigger Picture

The aesthetic and wellness industry is one of the fastest-growing in the UK — and HMRC is watching closely. The Illuminate decision signals increased scrutiny, clearer legal boundaries, and a push for professional, evidence-based practice.

For many clinics, this is the moment to tighten compliance, improve record-keeping, and ensure every treatment can stand up to legal and tax scrutiny.

Final Thought

The Illuminate Skin Clinics VAT case isn’t just about one business — it’s a wake-up call for the whole aesthetics sector. As the line between medicine and beauty continues to blur, transparency, documentation, and purpose will decide whether a treatment is exempt or taxed.

Stay informed, stay compliant — and don’t assume VAT exemption without evidence.