Improved profits by 10% courtesy of the VATman

Independent Opticians will spend vast amounts of time and effort worrying over how their profits are affected by product lines, equipment upgrades, staff bonuses, site test fees and CET courses amongst other things.

However that leaves very little time left for looking at the best VAT method for the practice, which according to Marc Bennett of VAT Specialists A E L, can add around 10-20% to their bottom line profits !

The problem according to Mr Bennett, is that Practice Owners leave their VAT method either to their internal bookkeeper (who has little VAT knowledge) or local accountant (who will have little knowledge or experience of how Opticians operate and will invariably not be a VAT specialist).

The main success story for A E L, making their debut as an exhibitor at OPTRAFAIR, was finding out just how many Opticians (and their current advisors) are completely unaware of agreed Customs & Excise policy on VAT.

The policy states that Opticians must approach Customs every THREE years to obtain official agreement to continue with their current VAT method. (Or earlier if there has been a major change to the ownership or operations of the practice). According to Mr Bennett, most independent practitioners leave it every five years, on average, to obtain agreement from Customs.

It should be noted that if the official three year timeframe is ignored, the practice could be liable for punitive penalties and interest following a subsequent Customs enquiry which uncovers that the Optician has underpaid VAT.

Mr Bennett believes that the three year review of their VAT method should be seen as a positive exercise for the practice owner.
It provides an opportunity to potentially improve both their existing VAT position and improve their bottom line profits, if the review is undertaken by someone with specialist knowledge of VAT and extensive experience of how Opticians operate.

A E L have advised hundreds of independent opticians on their VAT position since 1994 and have reclaimed over £5m of VAT refunds from Customs on their behalf.
Mr Bennett concludes "the independent practitioner cannot ignore the need to review their VAT position every three years. Simply sticking their head in the sand and hoping it will go away can cost them dearly".