V16.917 VAT—further information for dispensing doctors

Part V16 Forms and other HMRC material

V16.917 VAT—further information for dispensing doctors

V16.917 VAT—further information for dispensing doctors

Information Sheet 12/06, December 2006

1 Introduction

1.1 What is this Information Sheet about?

This Information Sheet provides further guidance to dispensing GP practices, many of whom registered for VAT following changes made to NHS funding from 1 April 2006. It does not concern the changes to the scope of the VAT exemption for medical care following the European Court of Justice judgment in the case of Dr Peter d'Ambrumenil and Dispute Resolution Services (C-307/01), about which further guidance will be issued shortly.

Information Sheet 03/06 provided advice on how and when practices affected by the NHS funding changes should register for VAT, as well as some basic advice on VAT liability and recovery.

2 VAT liability

Dispensing practices make supplies with a variety of VAT liabilities. Medical services (including drugs administered to patients in the course of treatment) are exempt from VAT. Drugs and appliances dispensed to patients for their personal use are taxable at the zero rate when dispensed under the NHS arrangements. Practices may also make supplies that are taxable at the standard or reduced rate. Further information is given below.

2.1 How do I treat income received from the NHS?

Dispensing practices receive a monthly Statement of Fees from the NHS detailing payments due to the practice. All of these payments (other than accounting or timing adjustments) are consideration for the practice's supplies to the NHS.

Payments relating to specific patient care activities (for example anti-coagulant monitoring, childhood immunisations, flu and pneumococcal vaccinations) are payments for exempt supplies.

“General” payments

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial