The company was made aware of a potential VAT bill in 2004 when it lost its VAT exemption status. While HMRC accepted that the company headquarters in Dolan Park was a hospital, it was determined that since the rest of the clinics were primarily responsible for aesthetic procedures, and therefore the company-wide exemption was lost. The original VAT bill totalled more than £17m, but this was later reduced to £8.2m after the company revised its return.
In July, a German private equity firm controlled by Aurelius Group acquired 90 percent of the parent company, TWP (Newco) 66 Ltd but the company changed hands again when the HMRC liabilities increased by £400,000. After going into administration on October 6th, the company was sold on the same day to Combine Opco Ltd, a company which lists former Hospital Group director, Jasvir Sanghera in a senior role.
This move has not only safeguarded the jobs of the 300 staff working in the clinics throughout the country but also secured the £3.5m in deposits taken from patients planning to undergo cosmetic procedures with The Hospital Group.
This will be of little comfort to patients who have already undergone procedures with the group that haven’t gone to plan. Dawn Knight was the subject of MP Kevan Jones’ address to parliament in which he called for an end to aggressive cosmetic surgery advertising which he said would be more suited for selling double glazing. Knight was sold a lifetime aftercare package by The Hospital Group but soon learned that this was meaningless in the face of a botched surgery.
Closer inspection of the fine print revealed that this aftercare package would only cover follow-up surgery if the patient and the surgeon both agree that follow-up surgery is necessary. With the surgeon in question refusing to admit that the surgery went wrong, no follow up could be offered. The situation is further complicated by the fact that the surgeon doesn’t hold professional indemnity insurance, and the clinic won’t take responsibility because they maintain that the surgeon is a contractor who only uses their premises, rather than an employee. It is these kinds of loopholes that MP Kevan Jones is calling for an end to.