Clinical Practice Prescribing
and Customs (HMRC) outline crucial points that explain when goods provided on prescription can be zero-rated for VAT purposes:3
Prescribing in medical aesthetics Pharmacist Brendan Semple discusses the role of prescriptions in medical aesthetics Often, the first thing many practitioners wonder when they complete their aesthetic training is how to access the drugs and devices that they are going to require in order to start their aesthetic practice. It can sometimes be their first venture outside of the NHS, and having to manage the legal, ethical and VAT implications can be quite daunting. This article seeks to clarify some of these matters and help you navigate the current legislation. All practitioners are able to purchase certain commonly-used products over the counter in a pharmacy. Needles, syringes, swabs, gloves, cannulas and, most surprisingly, dermal fillers are classified as medical devices and there are no legal barriers to their supply. In our pharmacy we always check a practitioner’s professional qualification and ensure that they have completed a course in the use of fillers before making a sale, but there is no legislation in place that prevents the supply of dermal fillers to anyone. These goods are subject to 20% VAT.1 Prescription only medicines (POMs) such as botulinum toxin, adrenaline, hyaluronidase and IV sodium chloride can be purchased directly from the manufacturer, a wholesaler or a pharmacy via stock order by a doctor or dentist. Supplies obtained in this way are also subject to 20% VAT.1 Nurse Independent Prescribers (NIPs) have similar prescribing privileges to doctors 36
and dentists, however their handling of stock is significantly different. NIPs cannot order stock in the same way as doctors and dentists as they always require a prescription to be written and dispensed prior to administering a POM to a patient. Consequently, they are unable to treat new patients at their first consultation. This is unless they work in the same clinic as a doctor or dentist, who is required to be present when the nurse administers the POM. In my experience, practitioners tell me the most convenient way to obtain the products they need is to send a prescription to a pharmacy. When writing a private prescription for a patient, there are some key points to bear in mind:2 • Once written, the prescription is the property of the patient • You must receive consent from the patient to send and receive their prescription • The transaction is between the patient and the pharmacy • Once dispensed, the medication is the property of the patient • The original copy of the prescription must be sent to the pharmacy within 72 hours One key advantage of prescriptions over stock-orders from a manufacturer or wholesaler is that, in certain circumstances, they are zero-rated for VAT. HM Revenue Aesthetics | January 2015
• The supply must be of ‘qualifying goods’ • The goods must be dispensed to an individual for that individual’s personal use • The goods must not be supplied for use for patients while in hospital or in a similar institution or administered, injected or applied by health professionals to their patients in the course of medical treatment • The goods must be dispensed by a registered pharmacist or under a requirement or authorisation under a ‘relevant provision’ • The goods must be prescribed by an appropriate ‘relevant practitioner’ The key point in the above legislation is that if the supply is for a medical treatment (exempt from VAT) then the prescription should attract 20% VAT. If the supply is for a cosmetic treatment (subject to 20% if VAT registered) then the prescription is zerorated. This means that whether the treatment is considered medical or cosmetic, HMRC are expecting to receive VAT at some point in the transaction. The only exception to this is if the practitioner is not registered for VAT and the patient is receiving a cosmetic treatment. The threshold for VAT registration is currently £81,000, therefore the patients of practitioners whose turnover falls below this amount may not have to pay any VAT in the course of their treatment.4 It is worth remembering that when a prescription is dispensed, the transaction is between the pharmacy and the patient. This sum is not part of the practitioner’s income and should not be part of the equation when considering whether you have reached the threshold to register for VAT. What records do pharmacists keep? When we receive a prescription for a new patient, we create a Patient Medication Record (PMR) on our pharmacy computer system. This will record the full details of any prescription including who wrote the prescription, the date it was written and what was prescribed. We make an entry in our private prescription register and we scan the Rx and attach a copy to the patient’s file.
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