VAT Changes to PGD Supplies (9th October 2023)

Medicines Supplies made via Patient Group Directions

At the 2023 Spring Budget, the Government announced that it would extend the zero rate on medicines prescribed on prescriptions to medicines supplied under Patient Group Directions (PGDs).

HMRC subsequently announced that from 9th October 2023 to 31st March 2027, the VAT rate for supplies of medicines made to patients using a Patient Group Direction (PGD) would be set at the zero rate.

This change only applies to PGD supplies where the patient is given the medicine to use; it does not apply where the medicine is administered to the patient, for example vaccination services, including the flu vaccination service.

Also See:

VAT on pharmacy professional services

Professional services provided by a pharmacist or pharmacy technician are exempt services from a VAT perspective.

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 said this change would bring the VAT treatment of pharmacists in line with other registered health professionals providing medical services to the public and it was a change that Community Pharmacy England had been seeking for many years.

We believe the extension of this VAT exemption will help pharmacy owners to make better use of the skill mix in their teams.

Read the HMRC note detailing the change to the VAT treatment of medical services

The change enables pharmacy owners, LPCs and service commissioners to review the VAT status of any locally commissioned services currently provided by non-registered pharmacy staff. Over time, it will also be used to amend nationally commissioned services to allow support staff to provide certain parts of the Advanced services.