Clatterbridge Pharmacy Ltd – FTT – VAT liability of certain supplies of cancer care drugs – taxpayer win
- Case Background: The First-tier Tribunal (FTT) ruled in favor of Clatterbridge Pharmacy Ltd (CPL) regarding the VAT liability of cancer care drugs dispensed to patients and administered by nurses from Clatterbridge Cancer Centre (CCC). HMRC had previously determined that these drugs were not for “personal use” as defined under VAT regulations.
- Arguments and Interpretations: CPL argued that the term “personal use” should include drugs administered by nurses to individual patients, while HMRC contended that such drugs were not for personal use since they are typically administered by healthcare professionals. CPL emphasized that legislative history indicated Parliament intended to exclude only certain hospital supplies from zero-rating, not those administered by health professionals outside hospital settings.
- Tribunal Decision: The Tribunal concluded that the ordinary meaning of “personal use” encompasses administration by medical professionals and affirmed that drugs dispensed to outpatients should be zero-rated for VAT, regardless of administration by registered health professionals. This ruling underscores the importance of statutory interpretation in VAT regulations concerning healthcare supplies.
To access the decision, click here.
Source KPMG
- Clatterbridge Pharmacy Limited is a subsidiary of Clatterbridge Cancer Centre NHS Foundation Trust.
- CPL supplies intravenous and injectable cancer medication to outpatients at home.
- Medication is administered by healthcare professionals, with CPL charging the Trust a fee.
- The First-tier Tribunal ruled that these supplies were zero-rated for VAT as they were for patients’ personal use.
- HMRC argued zero-rating should only apply to self-administered medication.
- HMRC believed personal use meant use as a private individual, not involving healthcare professionals.
- The Tribunal found HMRC’s interpretation too restrictive.
- The Tribunal agreed with CPL that personal use includes use in a private setting, even if not self-administered.
- CPL’s appeal against HMRC’s decision for standard-rating was allowed.
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.
