VAT & Prosthesis Meaning
The Upper Tribunal has overturned a First-tier Tribunal decision that Invisalign aligners qualify as VAT exempt dental prostheses, restoring HMRC's position that supplies of the aligners are standard rated.
Align Technology Switzerland GmbH had treated its supplies of Invisalign clear aligners as exempt, relying on the exemption for dental prostheses supplied by dentists and dental technicians. HMRC disagreed and raised assessments on the basis that the aligners were standard rated. Following a settlement of related judicial review proceedings, the underlying dispute over VAT liability proceeded to the First-tier Tribunal, which found in Align's favour in 2025. The Tribunal held that the ordinary meaning of dental prostheses, read in the context of the exemption's purpose of keeping health related products affordable, was wide enough to cover the aligners.
HMRC appealed, and the Upper Tribunal has now reversed that decision. The Upper Tribunal held that the First-tier Tribunal had erred in law by adopting too broad an interpretation of dental prostheses. In its view, a prosthesis is properly understood as an artificial replacement for a missing or damaged body part, such as a crown, bridge or denture. Aligners, by contrast, reposition existing teeth rather than replace them, and so fall outside the exemption. The Upper Tribunal also gave weight to EU VAT Committee guidance distinguishing dental prostheses from orthodontic devices, material the First-tier Tribunal had largely set aside.
The case is a useful illustration of how narrowly VAT exemptions are construed once a dispute reaches this level. A product can sit squarely within the everyday sense of a statutory term and still fall outside it once that term is tested against its precise legal meaning. Businesses supplying orthodontic or other borderline health related products, and the dental practices that purchase them, should treat this decision as the current legal position rather than the FTT's earlier ruling, pending any further appeal.
