VAT status of medicines administered/supplied under patient Group Directions (PGDs)
PGDs do not amount to prescriptions because they are not written for an identified, individual patient. The supply of items under a PGD will, therefore, be taxable at the standard rate (20%), except that:
However, the supply of contraceptive products supplied under a PGD will be taxable at the reduced rate (5%). Examples of prescription-only medicines administered/supplied under a PGD are seasonal influenza vaccination, travel vaccines and medicines to treat conditions such as erectile dysfunction, obesity and hair loss.
Community pharmacy seasonal influenza vaccination Advanced Service (England)
For providing the 2015/16 community pharmacy seasonal influenza vaccination Advanced Service, pharmacists received an administration fee of £7.64 for vaccinating each patient plus an additional fee of £1.50 to cover costs incurred in the provision of the service. For the purpose of VAT liability, these two fees were exempt from VAT because it was a patient-specific vaccination service administered by a pharmacist.
Pharmacists were also reimbursed the cost of the vaccine at the basic price (list price) and received a VAT allowance (standard rate – 20%) on the vaccine. This VAT payment needed to be declared on the normal VAT return as with any VAT standard-rated sales.
If the payment structure remains the same for the 2016/17 community pharmacy seasonal influenza vaccination Advanced Service, then the VAT liability will remain as above.
The NPA’s “VAT liability on pharmacy goods and services” resource is available from npa.co.uk.
It is advised that you seek expert advice from your accountant or a VAT specialist if more specific information regarding the VAT status of specific services is required, including advice on how to complete VAT returns. Please contact the local VAT office or the VAT helpline.
This is an extract from a Superintendent Update from the NPA. Sign up to receive updates at npa.co.uk/my-account.