Simplifying VAT for Opticians

HMRC has issued Revenue and Customs Brief 14 (2020) to announce simplifications to the processes used by opticians and dispensers of hearing aids to account for VAT on their supplies.

To date this has been a complicated process, as opticians that dispense spectacles or contact lenses to their customers make two supplies for VAT purposes: the spectacles or lenses themselves, which are taxable at the standard rate, and a supply of dispensing services, which is exempt from VAT.

From 1 October 2020, the processes will be simplified.

Businesses will be required only to hold a till slip or similar evidence to demonstrate that they are making two separate charges to the customer at the time of supply, and that this information is being conveyed to the customer.

Those using a method of apportionment will no longer have to seek prior approval from HMRC before operating a method. This will bring opticians and dispensers of hearing aids into line with other businesses that apportion VAT on their sales.