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HMRC internal manual

VAT Health

Pharmacists: Services which qualify for exemption

Exemption will apply only to the professional services for which the pharmacist has been registered and which meet the purpose test. This means that exemption applies when a registered pharmacist carries out services such as pregnancy testing or gives advice on giving up smoking . It will also apply to certain payments received from the NHS.

NHS community pharmacy services in England and Wales are now tiered according to complexity and demand. Details of the liabilities of essential and advanced services appear inNotice 701/57. Pharmacists in Scotland and Northern Ireland continue to receive the following payments, which are consideration for taxable supplies.

  • Rota service payments (which are paid to a small number of pharmacies in Scotland and Northern Ireland that open after hours, on early closing days and Bank Holidays etc);
  • Urgent fees (paid in Scotland and Northern Ireland where the prescription is dispensed outside both normal hours and the late night rota hours);

The NHS makes its payments to pharmacies on a monthly statement. This statement includes payment for exempt, standard-rated and zero-rated supplies and is the starting point when calculating the value of supplies under the retail scheme for pharmacists (described as “chemists” in Retail Schemes guidance) and when considering partial exemption implications.