Revenue and Customs Brief 2 (2020) - VAT zero rating for the dispensing of prescribed drugs
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Published 12 March 2020
Purpose of this brief
This Revenue and Customs brief announces a change to UK VAT law to
allow the zero rating of the dispensing of drugs prescribed by
appropriate practitioners from the European Economic Area (EEA) and Switzerland. This is as
a result of changes introduced in The Human Medicines Regulations 2012.
These changes apply to the whole of the United Kingdom.
Who needs to read this
Pharmacists in the United Kingdom and their VAT advisers.
At present, drugs and other qualifying goods dispensed by a
registered pharmacist to an individual for their personal use on the
prescription of an appropriate practitioner benefit from the zero rate
Medical doctors, dentists and other health professionals authorised
under the Human Medicines Regulations 2012 are deemed to be appropriate
practitioners for VAT purposes. Prescriptions from health professionals
from the EEA and
Switzerland currently do not fall within the zero rate when dispensed
by UK pharmacies.
These changes align the UK’s VAT legislation with the Human
Medicines Regulations 2012 which is administered by the Department of
Health and Social Care (DHSC) and allows
prescriptions written by EEA
health professionals to be dispensed by UK pharmacies. They extend the
VAT zero rate to such private prescriptions for the first time subject
to the same conditions as currently apply to UK prescriptions.
The VAT changes
(a) On 1 April 2020:
Note (2B) to Group 7 of Schedule 8 to the VAT Act 1994 defines an
appropriate practitioner by reference to a list. With effect from 1
April 2020 that list is to be extended to include suitably qualified EEA health professionals. These
are defined in regulation 213 of the Human Medicines Regulations 2012
and include qualified prescribers in member states of the EEA or in Switzerland.
As well as member states of the European Union, the EEA includes Iceland, Norway and
Liechtenstein. See the full list of EEA
countries see https://www.gov.uk/eu-eea.
These new rules will apply from 1 April 2020 until the end of the
transition period (31 December 2020 - see under 4(b) below).
(b) At the end of the transition period following the UK’s
exit from the EU:
Regulation 213 of the Human Medicines Regulations 2012 will be
amended with effect from the end of the transition period following the
UK’s departure from the EU. The amendments will introduce a list
of ‘approved countries’ and only those who are suitably
qualified to prescribe from these countries will be able to continue to
do so in the UK. This list will be curated by the DHSC. Following
these amendments, there will be a further consequential change made to
Note (2B) to Group 7 of Schedule 8 to the VAT Act 1994.
More information for these amendments and the list of recognised
qualifications for approved countries will be published on the gov.uk
For more information on the VAT treatment contact the VAT helpline, see
For more information on the system for recognising qualifications
after the end of the transition period see the DHSC
About the Author
© Crown Copyright 2020.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2020-03-17 21:47:45 in