Not seeing eye to eye

The taxpayer company was a UK-based retailer of prescription glasses running a website through which customers could order spectacles. A qualified dispensing optician supervised the supply but did not carry out eye tests.

The taxpayer contended it made two supplies in relation to each pair of prescription glasses: an exempt supply of medical services and a taxable supply of goods.

HMRC did not accept the claim of an exempt supply of medical services because there was no face-to-face contact with customers. The department argued that the medical care provided by the taxpayer was ancillary to the supply of prescription glasses and was therefore a single standard-rated supply.

The taxpayer appealed.

The First-tier Tribunal considered the taxpayer’s business in relation to the decision in CCE v Leightons Ltd [1995] STC 458 and concluded that the taxpayer’s dispensing opticians provided all the services set out in Leightons despite there...