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HMRC internal manual

VAT Valuation Manual

Specific applications: Opticians: Apportionment of charges for supplies of spectacles and dispensing: separately disclosed charges

An optician will not be required to perform an apportionment of charges for spectacle sales if he makes separate charges for the spectacles and the dispensing, thus establishing a separate consideration for each of the supplies. One of the normal criteria for establishing separate considerations is that customers should be able to obtain the supplies separately at the individual specified charges should they so wish. This is not usually possible with dispensing services which are normally “tied to” the supply of spectacles. Customs have therefore relaxed this requirement and will accept that separate considerations have been established for the spectacles and dispensing if the charges for each are stated and made known to all patients at the time of the supply.

Customs do not consider that separate considerations have been established where:

  • the costs of each supply and the final charge to the patient are recorded in the optician’s accounts but only a single charge is disclosed to the patient, or
  • separate charges are only disclosed to those patients who request the information.

If patients are informed of the charge for each supply, Customs does not require the optician to reveal how much of each charge is attributable to the cost of the supply and how much is profit or “mark-up”. Nor does Customs require the charges to be disclosed by any particular method. However, whatever method of notifying the patient is adopted, the optician must be able to satisfy HMRC that the information is actually being conveyed to all patients, whether they have requested it or not.