VAT services exemption introduced

From this month, healthcare services carried out by pharmacy staff under the supervision of pharmacists have become exempt from VAT. This is something that PSNC has been seeking Government agreement on for a long time, including in recent CPCF negotiations.

HM Revenue and Customs has issued a note detailing the change to the VAT treatment of medical services. It explains that, from 1st May 2023, the VAT exemption on medical services has been extended to include services undertaken by non-registered staff who are directly supervised by pharmacists. The Government says this will bring the VAT treatment of pharmacists in line with other registered health professionals providing medical services to the public.

PSNC believes that the extension of this VAT exemption will help as community pharmacy businesses try to make better use of the skill mix in their teams both now and in the future.

Not only does it enable contractors to review the VAT status of any locally commissioned services currently provided by non-registered pharmacy staff but also, in time, it could be used to amend nationally commissioned services to allow support staff to provide certain parts. For example, following a recent amendment to the service Directions, pharmacy technicians are now able to perform blood pressure checks as part of the Hypertension Case-Finding Service and deliver the Smoking Cessation Service.

This change is one of two VAT changes related to community pharmacy services that were announced in the Spring Budget earlier this year. At the time of the announcement, Janet Morrison, PSNC Chief Executive said:

“PSNC has been fighting for changes to these VAT rules for many years so it’s great to see this work finally come to fruition. The change to VAT exemption related to the provision of services being supervised by a pharmacist is a critical step if pharmacies are to make headway in making best use of the skill mix that they have, so while small in impact in the context of the current challenges, this is a very welcome development.”

Other VAT changes

In the budget, the Government also committed to extending the zero rate on prescriptions to medicines supplied to patients through Patient Group Directions.

HM Treasury said these measures were being introduced to ensure that the VAT system keeps up with changes to how the NHS operates and healthcare is delivered.

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