Independent Finance
for Independent Practices
VAT and de minimis
Treatment of VAT is key for small and medium optical practices.
Miscalculation could cost a practice significantly in any year.
VAT is assigned to 3 categories for an optical practice
Fully allowable
Partially allowable
Fully exempt
Retail side of the practice
Glazing Equipment
separately invoiced,
Display Equipment,
Retail area shopfitting,
Frames, Lenses,
Contact Lenses,
Accessories
Used both sides of the practice
Shopfitting,
Computers, Air
Conditioning, Rent,
VAT on services such
as Heating, Lighting,
IT & Telephony
Medical side of the practice
Sight Test Equipment,
Any purchases relating
to the supply of
exempt services
Should be 2x the
Exempt VAT
VAT is Split*
60% Exempt
40% Allowable
60% Exempt
40% Allowable
VAT on Fully Exempt
purchases + 60% from
partially allowable.
If this breaks £7,500
limit then NO VAT can
be reclaimed
*60/40 VAT split may vary by individual practice
The de minimis limit is currently £7,500 per year
- If you break the limit you lose all the VAT reclaim not just the amount above £7,500.
-
VAT is calculated on a quarterly basis - £1,875 (£625 per month)
If you break the quarter's limit you may be able to claim it back at the end of the year if you are within £7,500. - A Lease is the only finance solution that spreads VAT over the term reducing the impact on your de minimis position.
- With Abacus Professions Finance you can still own the equipment at the end of a Lease
Abacus Professsions Finance Ltd are not tax advisors - queries regarding your specific situation should be raised with your accountant
Abacus Professions Finance Ltd
info@abacuspf.co.uk www.abacuspf.co.uk
Registered in England No: 11317975
Abacus Professions Finance Ltd is authorised and regulated by the Financial Conduct Authority under reference FRN807121
