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HMRC internal manual

VAT Health

The services of the medical and paramedical professions: opticians: other supplies - free sight tests

Some opticians offer free sight tests to attract business. The liability of these supplies will depend on whether they are truly free or whether they are ‘free’ only to patients who subsequently buy their spectacles/contact lenses from the particular optician. If the patient can literally walk away from the optician offering the free sight test, having had his sight tested, with either a clean bill of health or with the prescription which he is able to take elsewhere, then there is no supply as there has been no consideration and any costs relating to the free supply should not be included when the optician apportions supplies of spectacles or contact lenses. If however, the ‘free’ test is conditional, there will be a supply for consideration and the optician will be required to apportion the charge made for spectacles or contact lenses.

In both cases, any VAT incurred on sight testing equipment is likely to relate to a business activity and will therefore be input tax. It should be dealt with in accordance with the normal partial exemption rules.