Hair-raising news – Price of hair transplants to soar

Following a recent decision by the first tier VAT tribunal, the cost of treatments to address pattern baldness (androgenic alopecia (AGA)) looks set to soar with the addition of 20% VAT.

Harley Street Farjo Hair Institute argued that its treatments for AGA should be exempt from VAT because they amounted to medical care. HMRC disagreed, arguing the procedures were for aesthetic purposes and therefore liable to tax.

The Tribunal found that in the case of 10 men treated by Farjo in 2021, the hair transplants were ‘purely cosmetic’ and therefore not exempt. However, it held that some transplants were administered because of genuine medical need eg cancer treatment or the clinical diagnosis of a psychologist and that these could remain exempt medical care. The VAT treatment needs to be considered on a case-by-case basis.

Prices at Farjo (without VAT) typically range between £3,000 and £15,000 with the average cost being £7,000 so the additional VAT cost will be between £600 and £3,000.

VAT liability reminder

Jaffa Cakes – 0% cakes

Pringles – 20% crisps (despite being minority potato, predominantly fat and flavourings)

Gingerbread – with two chocolate eyes only – 0% essential food

Gingerbread man – with chocolate buttons also – 20% luxury