The appellant, Mark Glen Ltd, provided hair extensions and wigs to NHS patients and claimed the services should be VAT exempt due to medical purposes as it provided ‘hair extensions and medical treatments for follicularly challenged’ individuals.

The appeal at the Upper Tribunal related to a £277,000 demand for unpaid VAT from HMRC, which the First Tier Tribunal (FTT) had come down against the appellant, leaving Mark Glen Ltd with a six-figure VAT bill.

The issue for the Upper Tribunal centred on whether supplies of the hair loss replacement system, known as the ‘Kinsey system’, qualified for zero rating under Schedule 8 Group 12 (Drugs, medicines, aids for the disabled, etc) of the Value Added Tax Act 1994 (VATA 1994) as a supply under Item 3 to a disabled person of services of adapting goods to suit their medical condition.

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