The VAT status of various types of product – including medicines – has always been a minefield. Very often, pharmacists can be left scratching their heads when it comes to the VAT status of pharmaceutical products.
Items supplied under Patient Group Directions (PGDs) are taxable at the standard 20 per cent rate because they are not written for an identified, individual patient.
However, if you provide medical treatment that is exempt from VAT, any charges for medicines/appliances which are administered or applied to your patient are also exempt. Typical examples include seasonal flu jabs, meningitis and travel vaccinations.
If you are uncertain, the simple test is as follows: can the item be separated from the treatment, i.e., can it be self-administered? If the answer is yes, then VAT will usually need to be applied at the standard rate.
Pharmacists who last year provided the community pharmacy seasonal influenza vaccination Advanced Service, were entitled to claim £7.64 in admin fees for vaccinating each patient plus an additional £1.50 to cover costs incurred in providing the service.
Both fees were exempt from VAT because it related to a patient-specific vaccination service administered by a pharmacist. The cost of the actual vaccine could also be reimbursed at the basic list price with pharmacies receiving a standard 20 per cent VAT allowance on the vaccine. Such VAT payments were then declared on the normal VAT return as with any VAT standard-rated sales.
Assuming that the payment structure remains the same for the 2016/17 community pharmacy seasonal influenza vaccination Advanced Service, the same rules for VAT should, theoretically, apply.
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