Boehringer Ingelheim: VAT on Pharma Payments to DHSC Appeal

• Boehringer Ingelheim Ltd (BIL) is seeking to appeal a decision regarding whether payments made to the Department of Health and Social Care (DHSC) under voluntary price control schemes should reduce the taxable amount of their pharmaceutical supplies.
• The initial FTT ruled that these payments did reduce the value of BIL’s supplies, considering the DHSC as the economic final consumer. However, the Upper Tribunal (UT) largely overturned this, stating that only payments related to excess sales growth for vaccines and medicines supplied directly to the DHSC could adjust VAT.
• The UT’s decision means that BIL cannot adjust the taxable amount for supplies made to wholesalers and pharmacies, limiting the scope for VAT reduction based on these payments.

Source KPMG

See Boehringer Ingelheim Ltd – Upper Tribunal Rules Against Taxpayer on Price Control Payments Reducing VATable Consideration – VATupdate

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