Compassionate Use Medicine Schemes: VAT Debate
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Lord Patel
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Compassionate Use Medicine Schemes: VAT
Lord Patel Excerpts(1 month, 1 week ago)
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Lord Patel (CB)
My Lords, going back to the question about access to compassionate medicine, as I understand, the Minister just stated that medicines that are not yet authorised or licensed can be issued if companies agree to provide them for free, and that HMRC charges VAT on them. If the medicines are free, how do you calculate VAT? If a shop gives away free chocolates, does it have to pay VAT?
Baroness Merron (Lab)
I am sure that the noble Lord would not want me to be quoted as suggesting that VAT should be charged on chocolates given free in shops, so I will not. The way in which VAT is calculated is a long-standing arrangement that companies are aware of. The medicines are treated as taxable deemed supplies, which means that VAT is applied even when no payment is made. VAT is worked out by calculating the value of those products, but if there is nothing similar, then an assumption is made. This is a usual way of dealing with that. I should also emphasise that VAT is a matter for His Majesty’s Treasury and has been for all these decades.