The VAT split report (medical vs cosmetic)

Aesthetics clinics often make two kinds of supply for VAT purposes: medical care (VAT-exempt when it meets HMRC's conditions) and cosmetic treatments (standard-rated). The VAT split report separates your takings along that line so your accountant is not doing it by hand.

Setting the category on each treatment

Every treatment has a VAT setting (Cosmetic or Medical) in Settings → Treatments; new treatments start as cosmetic. Each payment records the category of the treatment it relates to, so the classification is made at the moment of sale, which is what HMRC cares about. Retail payments carry their recorded sale category. In a diary product sale this is derived from the products: medical when the recorded categories are unanimously medical, otherwise cosmetic.

Reading the report

Go to Reports → VAT split, under Financial. You need Finance report access. It uses the period picker shared by every report, so a quarter is two clicks and a custom range is available where your VAT periods do not line up with calendar quarters. You get medical (exempt) versus cosmetic (standard-rated) totals, broken down by payment method and by type, with a CSV download for your accountant that carries whatever period is on screen. An Uncategorised figure shows any payment with no category, which needs checking against the original payment. Changing a treatment's category affects new payments, rather than repairing old entries. Choose VAT category when recording a new payment in Finance. The overview article covers the period picker, the exports and printing; the article on the financial reports covers the rest of the group.

Gift vouchers and top-ups: the stored value section

Money paid for a gift voucher or an account top-up sits in its own stored value section rather than in the gross figures. The report treats voucher sales as multi-purpose stored value and recognises revenue when that value is spent. Ask your accountant to confirm the appropriate VAT treatment for the vouchers you sell. When that value is spent at the desk as account credit, the redemption appears in the medical or cosmetic figures above at the treatment's own rate. The section shows both sides (sold and redeemed) so you can see the movement at a glance, and the CSV carries the same two rows.

Linked voucher and top-up refunds reduce stored value sold in the refund period. Postage recorded on a voucher payment is standard-rated revenue rather than stored value. A single refund of the full original posted-voucher payment reverses its postage too; partial refunds reduce the voucher liability only.

Two important caveats

• Classification is your clinic's responsibility. HMRC's medical exemption depends on the purpose of the treatment and who performs it, not just what it is. Agree the categorisation of your treatment list with your accountant.
• The report reflects what was recorded in AesthetiClinic; payments taken entirely outside the system will not appear.

The same medical and cosmetic categories are used by the invoice CSV export (Settings → Accounts), but that export lists payments one by one and does not apply the stored value treatment, so if you sell gift vouchers or take top-ups, have your accountant reconcile this report (or the direct Xero documents) with your other records before preparing your VAT return. See Gift vouchers and VAT.