VAT Treatment of Contact Lens Services: The Vision Direct Case and Exemption Considerations

• The issue in the Vision Dispensing Limited case was whether services linked to the online sale of prescription contact lenses were exempt from VAT.
• Opticians provide exempt medical care (sight tests, measuring, and fitting) and standard rated supply of goods (spectacles, contact lenses, accessories).
• An apportionment is required when a customer pays a single amount that covers both services and goods.
• VDL supplies services in connection with the online sale of contact lenses and the appeal was about whether those supplies are subject to VAT at the standard rate.
• The legislation provides exemption for medical care by registered or enrolled opticians or those directly supervised by them.
• VDL is a UK company and part of the Vision Direct corporate group, with a sister company based in the Netherlands.
• VDL operates a warehouse facility in the UK and dispatches goods to customers.
• Customers enter contracts with both VDBV for the supply of contact lenses and VDL for the supply of dispensing services.
• HMRC argues that there is little evidence of advice being provided by VDL and questions whether healthcare services are being supplied.
• VDL argues that its dispensing services are superior to those on the High Street.

Sources

• marcusward.co
• Constable

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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