The Department of Health and Social Care (DHSC) has provided clarification from HMRC that VAT is not applicable on products supplied in accordance with serious shortage protocols (SSPs). From 1 June 2023, the allowance for VAT currently paid alongside product reimbursement will stop being paid when reimbursing for products supplied in accordance with SSPs. Until the end of May 2023, for products supplied in accordance with a SSP, a VAT allowance will continue to be paid. This change will be reflected from the June 2023 Drug Tariff.
This change in VAT status for SSPs was initially communicated by Department of Health and Social Care (DHSC) and NHS England in the letter to community pharmacy owners published on 12 May 2023. Our members will need to reclaim VAT paid on the purchase of medicines supplied in accordance with an SSP, as they ordinarily do for medicines dispensed against prescriptions. HMRC will be updating their guidance on the correct VAT liability of SSP shortly.