Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will commission guidance from HM Revenue and Customs clarifying whether medicines supplied under the Early Access Medicines Scheme fall outside the scope of VAT Deemed Supply rules.

This question was answered on 29th October 2025
Under UK VAT law, some transactions where no money changes hands are treated as if a supply has been made – these are called deemed supplies.

This is to keep the system fair if a business has reclaimed VAT on costs (like making or importing goods), it should not avoid accounting for VAT when those goods leave the business for free.

Early Access to Medicines Scheme (EAMS) allows patients access to free medicines for life threatening conditions before receiving full NHS approval. Whether VAT applies to medicines or treatments provided for free under the EAMS will depend on the precise facts of the case. Where the supply of free medicine under the EAMS meets the criteria of a deemed supply, VAT will be due.

HMRC considers that the guidance around these rules is clear and long-established.