Revenue and Customs Brief 14 (2020) opticians and sellers of hearing aids changes for VAT
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Published 23 September 2020
Changes to the methods used by opticians and sellers of hearing
aids to account for VAT on their supplies
1. Purpose of this brief
This brief tells you about simplifications to the processes used by
opticians and dispensers of hearing aids to account for VAT on their
supplies. The changes will take effect from 1 October 2020.
2. Who should read this brief
VAT-registered opticians who dispense spectacles or contact lenses
to their customers and VAT-registered sellers of hearing aids.
3. Background
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. Similarly, dispensers of
hearing aids make a taxable supply of hearing aids and an exempt supply
of dispensing services.
To account for VAT on the taxable element of their sales, opticians
and hearing aid dispensers may either:
- use separately disclosed charges for each supply, notifying each
separate charge to the customer at the time of sale
- charge a single price to the customer and make a fair and
reasonable apportionment of the income between the taxable and exempt
elements of the supply, using a method of their choice, which must be
approved by HMRC
4. Changes
From 1 October 2020, the processes will be simplified.
There is currently no uniform standard of evidence required from
businesses to show that they are making separately disclosed charges.
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.
5. Guidance
HMRC’s guidance manuals will be updated to reflect these changes
from 1 October 2020.
About the Author
© Crown Copyright 2020.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2020-09-23 15:34:21 in Tax Articles
