How do dispensing doctors calculate how much of their NHS payment for drugs and appliances is taxable?
Dispensing doctors receive two statements from the NHS; one relating to dispensed drugs and the other to their supply of medical services. To determine the value of exempt supplies from the drug statement HMRC considers that, whilst not being entirely accurate, the net value of the VAT allowance can be used as a proxy for the exempt supplies of drugs. If you wish to determine exempt values more accurately you may, provided that the method used is not arbitrary and can be audited by officers of HMRC. An apportionment of the dispensing fees figure will also need to be made. VAT Notice 700 The VAT Guide gives details on acceptable apportionment methods.
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