Aligning the VAT treatment – or not?

This time, it’s all been centred around whether clear dental aligners are ‘dental prostheses’; because when supplied by the right type of professional a dental prosthesis is VAT exempt.  The law doesn’t go into detail about what a ‘dental prosthesis’ is for the purpose of the VAT exemption and Align Technology and HMRC disagreed on what should be encompassed.

Recap: The First Tier Tribunal (FTT) previously ruled that the clear aligners to straighten teeth were a dental prosthesis and VAT exempt.

The Upper Tribunal (UT) have now overturned the FTT’s decision and have concluded that a dental prosthesis is “an artificial item which replaces missing or damaged teeth.”  It goes on to confirm that “the expression does not extend to dental devices such as the Aligners” and therefore the supply of aligners will not be VAT exempt.  Of course, we’re yet to see whether the decision will be appealed, but for now this ruling is important because it creates a decision which is binding on others.

For dentists and healthcare providers offering services in this space, this ruling could be concerning, and quite frankly, confusing to apply to different offerings you may have.  It’s really important you consider the impact of this ruling on your supplies if you operate in this space.

If you’d like an informal discussion about what your next steps should be, please contact us or book a meeting.