It is a situation that ultimately affects most men: baldness. And cosmetic treatments for dealing with his points may have become 20 percent more expensive after tax authorities have won a £ 2.5m case against a Harley Street clinic.
The Hair Farjo Institute has argued that its remedies for bald pattern, known as androgenetic alopecia, should be exempt from VAT because they were equivalent to medical care. The revenue and customs of the HM disagreed with, arguing that the procedures were for aesthetic purposes and therefore caught by the levy.
The first -degree tax court ruled that, in the case of the ten men who were treated by the Farjo Institute in 2021, hair transplants were “clean cosmetics” and are therefore not exempt. However, he also decided that some hair transplants were given due to genuine The medical need-including the monitoring of cancer treatment or the official diagnosis of a psychologist-and should therefore be considered on a case-by-case basis.
Androgenetic alopecia (AGA) “is extremely common in the population” and affects 96 % of Caucasian men at some point in their lives, the court was heard. Thirty percent of men have a degree of hair loss at the age of 30 and 50 percent to the age of 50, according to a study reported in the court.
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The situation is so common that doctors who watched the hearing of disputes pointed out that “almost all the males present in the courtroom” – including the judge, lawyers, witnesses and observers – showed signs of androgenetic alopecia.
The Hair Farjo Institute, which negotiates as advanced hair technology, treats the condition with hair transplants. The “very intense” process involves taking healthier follicles from the back of the head and moving them to the front of the scalp. It may take several hours and the scalp is embarrassed with a local anesthetic before follicles are exported and repeated one at a time.
VAT -free prices at the London clinic start at £ 3,000 and can reach up to £ 15,000, depending on the surface treated. On average, they cost £ 7,000. In the light of the decision, treatment could cost between £ 600 and £ 3,000.
Dr. Bessam Farjo said his patients suffer from hormonal and genetic disease
Dr. Bessam Farjo, director of the Institute, argued that his clinic was medical rather than commercial, where there was a physician and patient relationship between him and his clients, who have hormonal and genetic disease.
The Court evaluated the clinic records in ten anonymous patients who were treated by fortnight in March 2021.
The archive in a 35-year-old man noted that he “feels very conscious and blames” vanity “-a firm for subtle and natural rehabilitation”, while a 40-year-old said that his hair loss “is very disturbing him … especially as he is a hairdresser”.
Dr. Rowland Payne, a dermatologist adviser who provided evidence to the court, said the case studies have shown that transplants “helped to restore the patient’s health” by protecting their skin from “photo -colonies, minor trauma and thermal attack”. The majority of patients had improved their psychological prosperity, he said.
Payne also argued that there were other consequences that were encountered by AGA suffering, including bald men had fewer sexual partners and received fewer interviews when applying for jobs from men who were not bald.
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However, the court disagreed with the position of the Hair Farjo Institute. During the decision on February 20, judges Nicholas Aleksander and Gill Hunter said the procedures of ten patients were not medical and did not qualify for VAT exemption. Judges also noted that, as hair transplants are rarely permanent, they cannot be regarded as a medical “treatment” for the purposes of VAT exemption.
The ruling stated a previous case by the Court of Justice of the European Union, which found that for the treatment it should be justified by psychological – and therefore medical – reason, there must be a formal diagnosis by a specialist psychiatrist or psychologist.
“The requirement that a psychologist may need to consult every person and must confirm that hair treatment is necessary for mental health reasons and therefore VAT is very high,” said Emma Beechey, director of Moore Kingston Smith.
The court also ruled that some hair transplants may qualify for VAT exemption and should be considered on a case -by -case basis. “Specifically, we believe that the patient whose hair loss occurred as a result of radiotherapy trauma will fall under the exception, as treatment is part of a continuous treatment for cancer and the repair of normal appearance after trauma caused by cancer treatment.”
HM Revenue & Customs (HMRC) had recorded the company to pay VAT in 2019 and later ordered to pay undeclared tax of £ 2.5 million and a penalty of £ 374,734. The fine has fallen since then. Following the decision, the case was referred to HMRC to review and agree to the amount of VAT responsibility.
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Turkey is a popular destination for those looking for cheaper options, with an average price of £ 1,500 per treatment, according to the WIMPOLE clinic. Most packages are generally all-inclusive of flights and accommodation. The Turkish government, in an attempt to encourage health tourism, has resigned from tax to certain medical services, including non -resident hair transplants in 2018.
The case is another example of a company found to argue whether their goods fall into the VAT mission. In 1991, HMRC claimed that the Jaffa cakes were cookies, while McVitie claimed that it was cakes and was therefore exempt from the extra contribution. McVitie’s won.
Meanwhile, male gingerbread with just two eyes chocolate are free from VAT, but any other chocolate decorative means the extra contribution is applied.
https://www.thetimes.com/uk/healthcare/article/harley-street-baldness-hair-transplant-vat-farjo-institute-h28f0p0ct
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