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HMRC internal manual

VAT Valuation Manual

Specific applications: Opticians: Apportionment of charges for supplies of spectacles and dispensing: current position

If a single charge is being made for supplies of spectacles and dispensing, opticians should now be apportioning this in accordance with a method that has been agreed with HMRC. Alternatively, they may be making separate charges for spectacles and dispensing which should be disclosed to all patients at the time of sale. Customs have no preference as to which of the above arrangements individual opticians adopt.

The Federation of Ophthalmic And Dispensing Opticians and its tax advisors have produced a simplified explanation of a full costs apportionment method. Annex 1 of this Information Sheet contains Customs’ technical guidance about a suggested full costs apportionment method. Either of these may provide the basis for an individual optician’s full costs apportionment method that can be agreed with HMRC. Opticians may propose other apportionment methods for Customs’ approval.

The Association of Optometrists and its tax advisors have produced a “Professional Fee Accounting System” that individual opticians may use to calculate their charges when these are separately disclosed to patients. Alternatively, the optician may use another system of his own choosing to calculate the individual charges. See paragraph 7.12.4 for guidance about the criteria that need to be satisfied to establish a true separation of charges.

It is a business decision for individual opticians whether they opt to disclose separated charges or apportion single charges.