Judgment summary
HMRC appealed against the decision of the First-tier Tribunal (FTT) in Align Technology Switzerland GmbH and Align Technology BV v HMRC [2025] UKFTT 462 (TC), which concerned the VAT liability of supplies of Invisalign clear aligners (the "Aligners") (1).
Align had treated supplies of the Aligners as exempt supplies of dental prostheses within Items 2 and 2A of Group 7 of Schedule 9 to VATA 1994. HMRC issued decisions that the supplies were chargeable to VAT at the standard rate. Align appealed to the FTT, which allowed the appeal (2). HMRC obtained permission to appeal on a single ground: that the FTT erred in its interpretation of the phrase "dental prostheses" and thereby misapplied VATA 1994 to the Aligners (3).
The Upper Tribunal (Mr Justice Edwin Johnson and Judge Jeanette Zaman) allowed HMRC's appeal (4).
Background
The Aligners are removable orthodontic appliances used by dental professionals to treat malocclusion by repositioning teeth, manufactured bespoke for each patient using 3-D scanning and the patented SmartTrack material (FTT[16]). Patients typically wear each set of Aligners for 20 to 22 hours a day, changing them weekly, with treatment lasting around 18 months on average (FTT[17]).
Aligners can treat conditions such as overbite, underbite, crossbite, crowding and spacing problems, and malocclusion can be associated with functional difficulties including issues with blood glucose regulation, speech, traumatic dental injury, temporomandibular disorders, tooth surface loss, periodontal disease and breathing difficulties (FTT[18]). There was no challenge to these FTT findings of fact (8).
The FTT recorded that it was not in dispute the Aligners are "dental"; the real issue was whether they are "prostheses" (FTT[20]). The FTT concluded that "dental prostheses" includes orthodontic appliances used to move a person's teeth, that this was consistent with the purpose of the Exemption, and declined to follow EU VAT Committee guidelines stating that "dental devices" are not "dental prostheses" (FTT[31]).
Core dispute
The dispute concerned whether the Aligners fall within the term "dental prostheses" in Items 2 and 2A of Group 7 of Schedule 9 to VATA 1994, which implemented Article 132(1)(e) of the Principal VAT Directive (Directive 2006/112/EC) (5, 6, 7).
A preliminary issue arose as to the nature of the Upper Tribunal's jurisdiction. Align argued that the meaning of the ordinary English words "dental prostheses" was a question of fact, so that HMRC's appeal could only succeed if the Edwards v Bairstow test was satisfied, relying on A Taxpayer v HMRC [2025] EWCA Civ 106 (13-16). HMRC argued this was a question of law concerning statutory construction, since the parties were contending for rival constructions of the expression (11, 25).
On the substantive issue, HMRC's position was that a "dental prosthesis" is an artificial item used to replace missing or damaged teeth, and does not extend to appliances for straightening teeth (40). Align's position was that the Aligners fell within a broader ordinary meaning encompassing orthodontic appliances, relying on dictionary definitions including the Oxford Dictionary of Dentistry (41).
Court findings
The Upper Tribunal held that the question of whether the Aligners fell within "dental prostheses" was a question of law involving a definitional dispute between rival constructions, distinguishing A Taxpayer, and concluded it was not bound by the Edwards v Bairstow test (25-27).
The Tribunal considered the purpose of the Exemption, referring to VDP Dental Laboratory NV v Staatssecretaris van Financien (Joined cases C-144/13, C-154/13 and C-160/13) [2015] STC 1133, which stated the exemption is intended to ensure health-related products do not become inaccessible due to increased costs from VAT (31). However, the Tribunal noted that context and purpose do not override or enlarge the wording of the Exemption, citing VDP Dental Laboratory NV v Staatssecretaris van Financien (Case C-401/05) [2007] STC 474 (33-36).
The Tribunal reviewed dictionary definitions of "prosthesis" and "dental prostheses", including the Oxford English Dictionary, Black's Medical Dictionary, the Oxford Concise Medical Dictionary, Taber's Medical Dictionary, the Oxford Dictionary of Dentistry, Heinemann Dental Dictionary, Mosby's Dictionary of Medicine, Nursing & Health Professions, Mosby's Dental Dictionary, and Stedman's Medical Dictionary (49-50, 64). It concluded that a prosthesis is generally understood as an artificial replacement for a missing or malfunctioning body part, enabling performance of the relevant bodily function, and does not extend to something external providing support or corrective treatment (54).
The Tribunal found case law from other contexts, namely Perry v Adjudication Officer [1999] NI 338 (concerning a colostomy bag) and Carden v Pickerings Europe Ltd [2005] IRLR 723 (concerning plates and pins in an ankle), to be compelling in showing the dividing line between a prosthesis and other artificial aids to bodily functions, even though decided in different statutory contexts (57-62).
On the addition of the word "dental", the Tribunal concluded this confirmed the prostheses referred to were those relating to teeth, without widening the natural meaning of prosthesis (63, 67). Applying this to the FTT's findings of fact, the Aligners were held not to be prostheses because they do not replace missing or broken teeth (68).
The Tribunal also considered EU VAT Committee Working Paper 880 dated 23 September 2015 and the Guidelines from the 105th meeting of the VAT Committee of 26 October 2015, finding the Working Paper admissible and according it and the Guidelines limited weight, concluding they provided additional support for the Tribunal's own conclusion that dental prostheses does not extend to dental devices such as the Aligners (69-95).
Outcome
The Upper Tribunal concluded that "dental prostheses", as used in the Exemption, means artificial items which replace missing or damaged teeth, and does not include the Aligners. The FTT therefore made an error of law in concluding that the Aligners are "dental prostheses" within the Exemption (96).
The Tribunal set aside the FTT Decision under section 12(2) TCEA 2007 and re-made the decision, holding that it did not require further evidence and could re-make the decision on the basis of the FTT's existing findings of fact, with no need for remission (98-100).
HMRC's appeal against the FTT Decision was allowed. The Tribunal set aside the FTT Decision and remade it to dismiss Align's appeal against HMRC's decision that the Aligners are chargeable to VAT (101).
Major issues / areas of contention
- Whether the Aligners constitute "dental prostheses" within Items 2 and 2A of Group 7 of Schedule 9 to VATA 1994.
- Whether the question of the meaning of "dental prostheses" was a question of law or a question of fact subject to the Edwards v Bairstow test, addressed by reference to A Taxpayer v HMRC [2025] EWCA Civ 106.
- The proper approach to construing VAT exemptions strictly while considering their purpose and context, addressed by reference to VDP Dental Laboratory NV 2015 and VDP Dental Laboratory 2007.
- How to weigh competing dictionary definitions of "prosthesis" and "dental prosthesis", including whether to treat "dental prostheses" as a composite expression.
- The relevance of non-binding UK case law on "prosthesis" from other legal contexts, namely social security and employment law.
- Whether the EU VAT Committee Working Paper 880 was admissible as an aid to interpretation, and what weight should be given to it and the resulting Guidelines.