Revenue & Customs Brief 7 (2023): Drugs & medicines under patient group directions

HMRC have published Revenue and Customs Brief 7 (2023) ‘Change to the VAT treatment of drugs and medicines supplied under patient group directions’. This sets out a temporary zero rating for VAT. 

Between 9 October 2023 and 31 March 2027, a zero rate of VAT will apply to drugs and medicines supplied under patient group directions.

• A patient group direction is a written instruction that allows healthcare professionals to supply and administer specified drugs and medicines to a pre-defined group of patients without a prescription.

This brings such supplies into line with Drugs and medicines dispensed on prescription by a registered health professional.

The new VAT zero rate applies to:

• The supply of drugs and medicines dispensed in accordance with a patient group direction issued under the Human Medicines Regulations 2012.
• Supplies made by a registered pharmacist (including a pharmacy technician in Great Britain (England, Scotland and Wales)) or by a General Practitioner practice where a pharmacy is too remote and dispensing is allowed under Note 2D, Group 12, Schedule 8, VATA 1994.

The zero rate does not apply to vaccines and medicines administered by a health professional.

• These supplies are exempt where the service is provided by a pharmacist or certain other medical professionals.
• Such services are regarded as medical treatment and not for personal use.
• The new zero rate only applies where the goods are administered by the patient.

Useful guides on this topic

Health and welfare: VAT
When does reduced rating, zero rating and VAT exemptions apply to services relating to medical care, health and welfare? What are the rules?

A beginner's guide to VAT
VAT: Where do I start? What is VAT? Who has to register for VAT? What rate should I charge? How do I calculate VAT? When are my VAT filing obligations?

Rates & Fractions (VAT)
What is the VAT rate? What is the VAT fraction for VAT at 5% or 12.5% or 20%? How do I calculate VAT? 

External link

Revenue and Customs Brief 7 (2023) ‘change to the VAT treatment of drugs and medicines supplied under patient group directions’.