This was an appeal against a decision that the majority of the appellants’ supplies of hair transplant services were subject to standard-rated VAT, that they should have been registered for VAT from July 2007, an assessment for £2,498,232 and a penalty for £374,734. The appellant appealed on the grounds that it made exempt supplies of medical services. 

HMRC withdrew the penalty assessment following evidence of an exchange of emails between HMRC and the appellant's advisors, which indicated that the medical exemption did apply and that the appellant had a reasonable excuse for late registration. 

The appellant offered a range of services in the treatment of hair loss, including hair transplants. A number of case studies were presented to the First-tier Tribunal (FTT) in order to assist it in reaching its conclusions. None of the cases cited problems with thermoregulation or sun protection as factors which led the