Member

The tax system is, as Members know, a matter for the Chancellor, so I will not get into details about that at the Dispatch Box, but under long-standing VAT rules, supplies of goods free of charge can still be treated as taxable ‘deemed supplies’ where input tax has been recovered. That means that VAT can apply even where no payment is made, reflecting established principles of the tax system. We recognise the concerns raised by industry and others about the potential impact of this treatment on the provision of free-of-charge medicines. We are working closely with the Treasury and His Majesty’s Revenue & Customs to explore options to address these issues, as witnessed by my honourable friend the Exchequer Secretary to the Treasury, who is here with me on the Front Bench. We will carefully consider the legal, fiscal and operational implications of any potential changes. Until then, we will continue to engage constructively with industry, the NHS and all our partners to make sure that British patients, whom we have in our thoughts at all times, have access to innovative medicines”.