Most contractors spend significant time at computer screens. With this in mind, can your company claim the cost of an employee’s eye test? And, what about the cost of corrective glasses?
As with all expenses, anything a company offsets against tax must be incurred ‘wholly and exclusively’ for the purposes of the business.
In other words, where something has a duality of purpose, you can’t reclaim it, as you would have had to incur the cost anyway.
For example, you can’t claim the cost of your personal broadband bill against the business, even if you’re working from home.
How does HMRC treat eye-related expenses?
According to S320A ITEPA 2003, an employer can claim the cost of an eyesight test and any corrective glasses, provided that the following conditions are met.
This section specifically exempts employer-provided eye tests and corrective appliances from being treated as a taxable benefit, provided the statutory conditions are met:
- The eye test is required under Health and Safety at Work regulations.
- Corrective glasses are made generally available to all employees.
If you regularly use display screen equipment, your employer must provide access to eyesight testing under the Display Screen Equipment Regulations. So the cost of the test should be allowable.
Importantly, the business must pay for any allowable costs directly. Otherwise, the employee pays income tax on the value of the benefit.
Where the cost of an eyesight test, spectacles or contact lenses is reimbursed to the employee, a taxable benefit arises.
You can see EIM21765 for the full requirements.
Corrective glasses/contact lenses – possible problems
| Scenario | Allowable expense? | Tax consequence |
|---|---|---|
| Eye test required under Health & Safety regulations | Yes | No taxable benefit if the company pays directly |
| Glasses used solely for screen/VDU work | Yes | No taxable benefit |
| General-use glasses with a specific VDU prescription | Partially | Only the VDU-related element may be allowable |
| General-use glasses with no VDU-specific prescription | No | Taxable benefit arises (income tax + employer NIC) |
| Employee pays personally and is reimbursed | Technically claimable | Always treated as a taxable benefit |
Example: A limited company director who works full-time at a screen obtains a VDU-only prescription. The company pays the optician directly for £160 glasses. No taxable benefit arises, and the cost is deductible for Corporation Tax purposes.
A potential problem arises if you claim the cost of corrective glasses as a business expense. This is due to the duality of purpose rules. Do you need the glasses all the time, for personal and business use?
Strictly speaking, you can only claim for eyewear used exclusively for work, not for non-work use.
a) Glasses used solely for business reasons
If the corrective glasses are used solely for contract work, the company can claim the cost as an allowable expense. Ensure that the prescription specifies that the glasses are required specifically for screen-related activities.
b) Glasses for general use, with some prescribed VDU use
HMRC states that you can claim a proportion of the cost from the company if it purchases glasses for general use but they include a special prescription for ‘VDU use’.
c) Glasses for general use, no specific VDU prescription
However, if you claim the cost of glasses without a specific special prescription for VDU use, this gives rise to a taxable benefit.
In other words, you will need to pay income tax on the cost of the glasses, and the company pays employers’ NICs on the value of the benefit.
Practically speaking
The cost of an eye test should be allowable, although many opticians offer them for free.
Read the eligibility criteria to see if you are entitled to a free eye test courtesy of the NHS.
As you can see, HMRC’s rules are strict.
Unless you genuinely need corrective glasses for your contract work, claiming the cost from your company may be impractical.
HMRC expects the company to retain the optician’s invoice and evidence of the VDU-specific prescription.
If you make a claim, keep the paperwork, just in case you need to justify an expense in the future.
Make sure you discuss your situation with your accountant before relying on any advice provided within this guide.
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