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The bad news

There are some items that are actually Personally Administered in the practice but
neither the HMRC or DHSC recognise them as a Personally Administered item, and
this means that the VAT is lost on these items.

The bonus

Some items are classed as PA by the
DHSC but also classed as dispensed
items by the HMRC.

This of course means that you claim
VAT from the HMRC as well as the PA
allowance from the NHS Prescription
services. Again, there is no need for any
intervention here.

Examples but not a definitive list would be:

• Insulins
• Injectable Low Molecular Weight Heparins. Clexane, Inhixa, for example
• Sumatriptan
• Genotropin
• Instillagel
• Haemorrhoid Preparations containing local anaesthetic

I will leave you to decide whether the good news outweighs the bad here……

I suspect that there will be some people that are reading this that send prescriptions
for some of the above items to a local chemist? Please don’t, there is no need, and
you will see the value of the VAT in the GPP Statement will increase…
Unused PA items
If your practice has items that are PA but have expired the VAT can be claimed
back on these items. Likewise, if there is a power cut or fridge failure you are also
able to claim VAT back on any affected items.
In order to ensure that you are handling Personally Administered items correctly,
please ensure that every month your accountant is aware of all expenditure that is
eligible for Input Tax, and that all prescriptions for Personally Administered items are
submitted at the end of the month. Then you won’t go far wrong!
In summary, the two key points to take away are: VAT and Personally Administered
Items (PAI) are two separate things. VAT is reclaimed from HMRC as you have
already paid the tax to the wholesaler, while the PA allowance fee is provided
automatically by NHSBSA without the need for a claim.
It is important to provide the finance manager with a list of the actual PA items
administered in practice to exclude them from the VAT claim, rather than a list of all
items classified as PA by the NHS, such as insulin.

Tips From The Field | PS Magazine 13

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