VATVAL12320 - Specific applications: Opticians and dispensers of hearing-aids: background

Since 1995, following the High Court’s ruling in Leightons Ltd (LON/92/2521), the sale of spectacles by opticians constitutes two separate supplies, one of standard-rated goods and one of exempt dispensing services. Opticians can account for output tax on the taxable element of spectacle sales by one of two methods:

1. Separately disclosed charges (see VATVAL12340)

2. Apportionment (see VATVAL12360 and VATVAL12400 for an example of an apportionment method)

It is a business decision for opticians whether they choose to apportion their sales or use separately disclosed charges. HMRC has no preference for one or the other.

The same principles apply to sales of contact lenses by opticians and hearing aids by hearing aid dispensers.

References to spectacles in this guidance should therefore also be taken to include contact lenses and hearing aids.

Further information on the liability of all supplies made by opticians and dispensers of hearing aids can be found in the VAT Health manual at VATHLT2160 (opticians) and VATHLT2370 (hearing aid dispensers).