Survey reveals confusion over VAT matters

Most owners of optical practices do not fully understand the way value added tax affects opticians, according to a survey carried out by Optician in association with chartered accountants and VAT consultants Alexander Edward Lee (AEL).

Preliminary findings of the research show that as few as one in seven optical practice proprietors fully understand the way that VAT affects opticians and that one third either ‘understand some of it but are mostly confused’ or ‘do not understand it at all’.

The research also found that more than one third of all respondents had not complied with HM Customs & Excise regulations to file a VAT method review within the past three years, and could therefore be subject to additional VAT assessments, default penalties and interest.

Twenty-nine per cent of those responding admitted that their accountants did not specialise in VAT and did not have experience of working with  other opticians, while more than 100 respondents (19 per cent) described their accountant as having experience of working with other opticians but without being a specialist in VAT.

Over half (52 per cent) of respondents did not know whether the VAT method they used was the most beneficial for their practice, with 38 per cent declaring that it was.

Marc Bennett, a partner at AEL, said: ‘While the findings are not a surprise to us, it is still disappointing to see so many practices suffering more VAT than they have to and not taking advantage of the additional profits that can be gained from maximising their VAT position.’

Nearly 600 visitors to opticianonline.net completed the survey in April, answering questions on VAT, company dividends and the reimbursement of personal costs incurred on behalf of their business.

The full results will be published in Optician on June 30.