Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her (a) Department and (b) HMRC have conducted on the potential impact on clinical trial numbers from the introduction of VAT to medicines provided free under Early Access Medicines Scheme programmes.

Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)

VAT is the UK’s second largest tax, forecast to raise £180 billion in 2025/26. Taxation is a vital source of revenue which helps to fund public services.

Early Access to Medicines Scheme (EAMS) allows patients access to free medicines for life threatening conditions before receiving full NHS approval.

Under UK VAT law, some transactions where no money changes hands are treated as if a supply has been made – these are called deemed supplies. This is to keep the system fair. Whether VAT applies to medicines or treatments provided for free under the EAMS will depend on the precise facts of the case. In certain circumstances the giving of goods away for free can be outside the scope of VAT. Where the supply is within the scope of VAT a relief may apply, meaning the supply can be made VAT free.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment (a) her Department and (b) HMRC have conducted on the potential impact on patient access to innovative medicines from the introduction of VAT to medicines provided free under Early Access Medicines Scheme programmes.

Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)

VAT is the UK’s second largest tax, forecast to raise £180 billion in 2025/26. Taxation is a vital source of revenue which helps to fund public services.

Early Access to Medicines Scheme (EAMS) allows patients access to free medicines for life threatening conditions before receiving full NHS approval.

Under UK VAT law, some transactions where no money changes hands are treated as if a supply has been made – these are called deemed supplies. This is to keep the system fair. Whether VAT applies to medicines or treatments provided for free under the EAMS will depend on the precise facts of the case. In certain circumstances the giving of goods away for free can be outside the scope of VAT. Where the supply is within the scope of VAT a relief may apply, meaning the supply can be made VAT free.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential impact of introducing VAT to to medicines provided free under Early Access Medicines Scheme programmes on pharmaceutical companies.

Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)

I refer the honourable member to the answer that I gave to PQ UIN: 87051.