It came as a great shock to most Opticians that Customs & Excise have decided that as of the 1st June 2001 all previously agreed methods of calculating VAT on spectacle dispensing in the UK will be terminated and that the Dispensing of Spectacles will attract the FULL rate of VAT at 17.5%. This will effectively mean that for every pair of spectacles dispensed in the UK an increase in price to the public of about 10% will result.

The History of VAT and spectacle dispensing in the UK has been a long and hard battle with Customs and Excise, won by the Optical profession on several occasions, much to the annoyance of VAT inspectors. The Optical Profession won the previous battles by proving that a part of the sale of Prescription Spectacles was a professional dispensing function, which are deemed as VAT exempt. This meant that only the actual supply of the frame and lenses was eligible for VAT. In most cases this resulted in patients only paying approximately 10% VAT instead of the full 17.5%.

The New rules are the result of a recent judgment in the UK House of lords, where it was claimed by a credit card company, that credit card sales of spectacles were a single supply and not a composite of two elements (Goods and Dispensing).

The Optical groups and associations in the UK have advised their members not to take any individual actions against this move as they (the associations) intend to mount a united defence against the moves by the Customs and Excise Office.      # 1ST MARCH 2001