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HMRC internal manual

VAT Health

Dispensing by a pharmacist: NHS payments to pharmacists

The Health Authority sends a monthly payment statement to each dispensing pharmacist in its area detailing how many prescriptions have been dispensed by that pharmacy and what payments are being made to it. The major element of this statement (and indeed the major source of income for most retail pharmacies) will be the refund by the Health Authority of the cost of the qualifying goods dispensed. This payment is consideration for the zero-rated supply of dispensed qualifying goods. The payment slip also covers a variety of other allowances which may be exempt or zero-rated.