As a healthcare specialist, you have expert knowledge no ordinary general practitioner can have accumulated. A depth of knowledge, years of experience and a set of tools designed for the job enable you to provide an accurate diagnostics and treatments, confidently and consistently.
It’s the same with us.
We are specialists in accountancy for opticians, optometrists, optical practices and optician locums, having acquired our own insights into the pitfalls to avoid and processes to follow to maximise your wealth, both on a personal level and for your business.
And it is especially true when the complex area of VAT is involved, and the particular rules and anomalies that apply to optical products. This is an aspect of accounting for opticians in which we are especially adept.
Indeed, I have recently published a new book, “How to Start and Run a Successful Optical Practice” and I’m delighted that it seems to have received some very positive critical acclaim and is being hailed as the definitive guide for optical healthcare professionals wishing to set up their own practice.
You can get your FREE copy here or visit our stand B218 for printed version.
Recover output VAT you may have overcharged historically
One of the biggest areas for financial savings we make for our clients is in their VAT.
An optician has a legal right to correct his or her VAT return retrospectively for a 4 year period, but any retrospection can only be applied using approved FCA methodology and it is not currently possible under the SDC system.
So provided that you understand the application process, and if you can show that revised calculations allow a fairer apportionment of the tax, HMRC is usually willing to accept your claim and will allow you reclaim what could amount to several thousands of pounds.
If done incorrectly, however, your application may well prejudice your claim, and you could lose out on what is rightfully yours.
How the FCA and SDC methodologies differ, and how you can ensure that you apply the most tax efficient option
There are two methodologies that opticians can use to account for their output tax: the FCA (full cost apportionment) system, and the SDC (separately disclosed charging) system.
If you choose the FCA method, this has to be agreed with HMRC for individual practices, as it requires a ‘proper attribution’ of value as between the standard-rated spectacles and exempt dispensing. In many cases, this apportionment method will be the most practical method to use, and it is also easier to implement.
However, if you wish to apply the SDC system for spectacles and dispensing, the charges need to be disclosed to each patient at the time of sale, but in the vast majority of cases, this system would provide a greater saving of VAT going forward.
HMRC can’t force you – or any optician – to use a particular method; it is your responsibility to choose, and the outcome will depend on the specific way your structure your business. It’s a complex equation, so having someone who has a long pedigree of dealing with the VAT implications for opticians alongside you can be invaluable.
When is the leasing of an asset beneficial for VAT recovery purposes?
This is a question we’re often asked, and the answer is that it depends on the de-minimise limit, which currently stands at £7,500 per year (or £625 per month). If your related input tax for exempt supply is below this limit, you can claim full VAT back, but if you exceed this limit, you will lose all of it.
By breaking down the cost of the asset and spreading the VAT incurred over a number of years, we can enable the practice to remain de-minimised. Then it is better to lease it, and you will, at least, be able to get your VAT back.
Therefore, it is important to seek professional advice when buying expensive equipment or undertaking any major refurbishment work at your practice.
We’re here to help, and we know our stuff. Do get in touch if you’d like to know more.
What makes SIAL different?
Aside from our detailed understanding of the healthcare sector, we’re geared to helping you succeed. We’ll encourage you to benchmark your financial status, set targets, track your performance and continually improve.
We’re not a massive firm, but we do offer professional, personalised, tailored solutions, because everyone’s circumstances are different. Only once we know yours can we formulate the most cost-efficient approach, and create a package that suits you, and help you to transition smoothly from your existing advisor.
So contact our experienced, friendly team today on 020 8532 9999 for an initial chat, or to book a consultation. We’ll explain what we can do to help you, and the advantages of working with a specialist accountant.
To find out more about our specialist optician accountancy services, visit www.sial-healthcare.co.uk/opticians-accountants
SIAL Healthcare has worked alongside countless optical healthcare professionals, and is a proud member of the ICAEW Healthcare Group. Whilst many of the firm’s clients are located in London, we have clients throughout the UK and beyond.