VAT Update for Opticians & Hearing Aid Dispensers
Just a quick reminder that with effect from the 1 October 2020 HMRC have simplified the nature of the evidence that they required these types of businesses to hold in order to verify the value of the supplies they make that would be taxable for VAT purposes. Opticians and Hearing Aid dispensers make effectively two separate supplies – one of the goods themselves – the glasses and contact lenses or the hearing aid - which is subject to VAT and the other, the healthcare service of testing and dispensing, which is VAT Exempt.
The updated guidance which can be found here clarifies how these businesses can apportion and evidence that apportionment between these two types of supplies. Effectively making VAT accounting a bit simpler. The notice confirms that:
“From 1 October 2020, the processes will be simplified.
There is currently no uniform standard of evidence required from businesses to show that they are making separately disclosed charges. Businesses will be required only to hold a till slip or similar evidence to demonstrate that they are making two separate charges to the customer at the time of supply, and that this information is being conveyed to the customer.
Those using a method of apportionment will no longer have to seek prior approval from HMRC before operating a method. This will bring opticians and dispensers of hearing aids into line with other businesses that apportion VAT on their sales.”
Any steps to make VAT accounting in any sector is to be welcomed so at a practical level affected businesses would be advised to see if this change can save them management time when working out how they account for their VAT liabilities. As ever if Centurion VAT can be of assistance do not hesitate to get in touch with us at email@example.com – we’re here when VAT gets complicated.
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