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
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
Registered in England No: 11317975
Abacus Professions Finance Ltd is authorised and regulated by the Financial Conduct Authority under reference FRN807121

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