VAT Rates

[.Flyer]

Is there anywhere online that lists VAT rates applicable to certain goods/services, similar to Irish Tax & Customs?

I've just spent the last 15 minutes trying to find out which rate is applicable to an eye test (suspect it's zero-rated, but not entirely sure). The C&E website isn't much help and a general Google search doesn't throw up anything. Seems such an obvious resource to need that I'm sure it's looking me right in the face...

[Eric Mc]

I think it might actually be Exempt rather than Zero Rated.

Eye tests are included under the Exempt category of "Health and welfare services".

[StuMartin]

I believe it may well be. But, conversely, the additional services of selling spectacles and fitting may be standard rated.

If you happen to be starting out as an optician, I'd speak to an accountant.


although as your profile states IT consultant, I'm thinking probably not, doh!

Edited by StuMartin on Tuesday 5th June 11:55

[Eric Mc]

There was a VAT case about this many years ago. HMC&E were insisting that opticians providing eye tests AND selling spectacles should charge VAT on the full sale value of the combined service.

They were overuled and now spectacle (and contact lens) sales only are subject to VAT.

[smartie]

I deal with an optician who uses a scheme where output tax is based on his purchases. Can't remeber the calculation but he pays very little VAT in relation to his turnover.

He had a (large) refund a few years ago when the ruling was made and the refund, and the scheme he now uses were agreed with HMC&E with a very competant VAT consultant.

[.Flyer]

Eric Mc said:

I think it might actually be Exempt rather than Zero Rated.

Eye tests are included under the Exempt category of "Health and welfare services".

Thanks, I'll put it down as exempt. I'm entering the receipt on my accounts system, but the receipt doesn't indicate the VAT element. It was purely for an eye test.

So, there is no quick check-up facility anywhere (apart from the Helpline)?

Stu, nice idea (pay enough to them) but you were right the second time.

[Eric Mc]

If you make "Exempt Sales", you are supposed to apply the "partial Exemption" rule. This means that you must restrict the amount of Input VAT you recover on your costs. In simple terms, if 50% of your Sales income was VAT Exempt, you can only claim back 50% of the Input VAT on your costs.

Thjis is significantly different to the situation where you have "Zero Rated" sales. With Zero Rated sales there are no restrictions on u=your Input VAT claims.

For those who find themselves caught in the Partial Exemption trap, there are "De Minimis" levels whereby you can claim back all the Input VAT provided the restricted Input VAT does not exceed the monthly de minimis threshold (£625 per month).

I love VAT - it is so straightforward (not).