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HMRC internal manual

VAT Valuation Manual

Specific applications: Opticians and sellers of hearing-aids: sellers of hearing-aids

The position of dispensers of hearing aids is very similar to that of the opticians. They make standard-rated supplies of hearing aids and exempt medical services and there is the same need for the charges made in respect of these supplies to be apportioned. The information in VATVAL12360 can therefore be regarded as also applicable to dispensers of hearing aids.

You may find traders referring to the case of Ultratone Ltd (MAN/90/299) to support an apportionment proposal with a ratio of 20% standard-rated to 80% exempt charges. This “split” should not automatically be accepted for the same reasons that Leightons and Eye-Tech do not set standard VAT values.

In Ultratone, the trader had been treating 20% of its charges as standard-rated and 80% as exempt. Customs had argued that the charges were wholly standard-rated because the ancillary services were provided free of charge so that no part of the charges represented consideration for their supply.

In the event, the question of consideration and apportionment was never considered by the Tribunal because the assessment was withdrawn by Customs and the Appellant in turn withdrew its appeal. All that the Tribunal ultimately considered was the basis upon which costs were to be awarded to the Appellant.

Links to the liabilities of opticians supplies:

Eye Sight Test
Opticians General
Contact Lenses