Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Pharmacists
  • Essential services
  • Practice payment (until 30 November 2016)
  • Essential service payments (from 1 December 2016)
  • Advanced services
  • Enhanced services (locally commissioned services)
  • Pharmacists in Scotland and Northern Ireland
  • Other payments received by pharmacists
  • Electronic prescription service (EPS)
  • Prescription charge refunds
  • More...


IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

The main activity of a pharmacist is the dispensing of drugs upon a doctor’s prescription to a customer and this activity is zero-rated.

The supply of certain services by a person registered in the register of pharmacists maintained under Pharmacy Order 2010, SI 2010/231, Article 19 or in the register of pharmaceutical chemists kept under the Pharmacy (Northern Ireland) Order 1976 is exempt from VAT.

The exemption only applies to professional services for which the pharmacist is registered to undertake, such as providing pregnancy testing and smoking cessation products. Certain payments received from the NHS may also be exempt from VAT.

Community pharmacies are obliged to provide certain essential services to their patients and they can also offer additional services. These are explained below. The various services offered have differing VAT treatments and are also outlined below.

Essential services

Essential services comprise dispensing and repeat dispensing, disposal of unwanted medicines, ‘signposting’, promotion of healthy lifestyles, support for self-care, and support for people with disabilities.

The table below provides an overview of the VAT treatment of these services:

ActivityVAT treatment
Dispensing and repeat dispensing by a registered pharmacist against a prescription issued by a doctor, registered nurse or dentist. See the Doctors and Dentists guidance notes for more informationZero-rated supply of goods under VATA 1994, Sch 8, Group 12, Item 1
Disposal of unwanted medicines. The pharmacy will normally store the unwanted medicines until the Primary Care Trust (now Clinical Commissioning Group) (or similar) arranges to collect the goodsService is liable

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