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HMRC internal manual

VAT Health

The services of the medical and paramedical professions: opticians: the supply of contact lenses - liability

Although the Leightons case specifically excluded contact lenses, we now recognise that other than the sight test which is and always has been wholly exempt, supplies of contact lenses are a mixed supply of goods and services in which the service element extends to all types of professional services, including. measuring, trialling, fitting contact lenses, training patients in contact lens insertion and removal and informing patients about hygiene and safe care regimes and aftercare.

Hence, to determine the liability of supplies of contact lenses, you need to follow the same three-stage approach as set out for spectacles in VATHLT2190. The following table shows the most common elements involved in the supply of contact lenses and their respective liabilities to VAT, and which costs should be allocated to the standard-rated and exempt elements respectively. One of the methods detailed in Notice 700 The VAT Guide or an alternative. Full Cost Apportionment method agreed between the Optical bodies and HMRC can be used, provided it gives a fair and reasonable result and can be supported by valid calculations - see VAT information Sheet 8/99. A number of optical practices now separately disclose their charges for the supply of goods (lenses) and the supply of the dispensing service. In this case there is no requirement to undertake an apportionment.

Table 1 Supplies of contact lenses - standard rated and exempt elements

  Standard-rated supplies Exempt supplies
Eye test   Medical tests - includes eye test, glaucoma test, slit lamp examination of cornea, measurement of visible iris diameter, kerometry measurements of corneal curvature
Consideration for contact lenses - to be apportioned Lenses Fitting tests - includes assessment of fit using magnification, assessment of vision with contact lenses, over-refraction with contact lenses
  Supply of disposable or replacement lenses where this does not involve new check ups or refitting Further professional advice - includes instructions on insertion or removal, instruction on cleaning and maintenance discussion of wearing schedule, advice on type of lens material, advice on brand of lens, advice on coatings, tints etc and final decision on best wearing schedule
  Repolishing and cleaning contact lenses Follow up action - includes checking of fit and comfort, review of insertion and removal procedures on follow up visits, lens assessment and trial of different types and altering power or shape of lenses
  Lipo treatment to soft lenses Producing a report on the condition of a patient’s eye(s)
  Accessories e.g. lens fluids and cases