- Boehringer Ingelheim Limited supplied pharmaceutical products to the NHS in the UK at the standard rate of VAT
- Between 2014 and 2020, BIL made payments to the Department of Health and Social Care under voluntary schemes to control NHS spending on branded medicines
- BIL claimed over-declared VAT, arguing that the payments should reduce the consideration for its products
- HMRC rejected the claim, but the First-tier Tribunal agreed with BIL
- The FTT held that the payments to DHSC reduced the value of consideration received by BIL for its supplies, reducing the taxable amount
- The FTT found that when the price of a supply is reduced after it has taken place, the taxable amount must be reduced
- The FTT disagreed with HMRC’s argument that there was an insufficient link between the payments and the supplies to NHS bodies
- BIL’s appeal was allowed by the FTT
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
