VATVAL12340 - Specific applications: Opticians and dispensers of hearing-aids: Separately Disclosed Charges

An optician may account for output tax on the sale of spectacles by making separate charges to the customer for the spectacles and the dispensing service, thus establishing a separate consideration for each of the supplies. Usually one of the 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. HMRC have therefore relaxed this requirement for opticians 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.

HMRC 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, HMRC 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 HMRC 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.

Revenue and Customs Brief 14 (2020) clarified that this can be achieved through the presentation of a till slip or invoice, showing that separate charges were disclosed to the customer at the time of sale.