Changes to VAT outlined in the Spring Budget by the Chancellor yesterday will level the playing field for community pharmacy when it comes to commissioned services.

Currently, services carried out by staff under the supervision of a pharmacist are eligible for VAT, while those carried out under a supervision of a GP are not. This means that services such as health checks or blood pressure checks cost the NHS 20% more to commission through community pharmacy teams rather than through general practice.

But from 1 May, services carried out by staff directly under the supervision of a pharmacist will become VAT-free, in a move which pharmacy leaders said will allow better use of the skills mix within community pharmacies.

The Company Chemists’ Association (CCA) said that this will ‘place pharmacists on an equal footing with GPs and other prescribers’.

Malcolm Harrison, chief executive of the CCA, told The Pharmacist that the changes were ‘not about trying to out-compete GPs’ but would give community pharmacies more of a ‘level playing field’, enabling them to ‘deliver more for the taxpayer’.

He added that this would create a ‘much more competitive commissioning environment’ when pharmaceutical services become locally commissioned under Integrated Care Boards from 1 April 2023.

And a spokesperson for the National Pharmacy Association (NPA) said that the changes would mean that 'the determining factors when deciding how to deliver a clinical professional service will rightly be about patient safety and workflow rather than tax considerations'.

The budget also announced that medicines supplied under a patient group direction (PGD) would become VAT-exempt from this autumn, in line with medicines supplied under prescriptions.

Currently, only medicines that are prescribed by a ‘relevant practitioner’ – including GPs and pharmacist independent prescribers – are exempt from VAT. Mr Harrison said that this made commissioning the supply of medicines under a PGD – such as flu jabs and antibiotics – ‘less attractive for the commissioner because they know that they'd have to pay 20% more on top of it’.

But from this autumn, the cost of medicines supplied under a PGD will also become VAT-free.

Mr Harrison said that this would be particularly welcome as community pharmacies move towards delivering more clinical services, especially in the interim until pharmacist independent prescribers become more widespread.

He said that the changes were ‘fundamental to unlocking the potential of community pharmacy’, as they would allow more pharmacy team members to deliver services at a competitive rate.

The NPA added that changes would allow pharmacies to provide more solutions for patients, such as within travel clinics.

Mr Harrison commented: 'These measures will boost capacity in pharmacies, and crucially pave the way for the future commissioning of clinical services in community pharmacy.

'We hope that this is the launchpad for further announcements in the upcoming Primary Care Recovery Plan, including a fully-funded Pharmacy First service in England – a no-brainer for patients, primary care and the NHS'.

While some other pharmacy bodies welcomed the VAT changes and the fact that the government had listened to the sector on this issue, they said that the Budget was a missed opportunity to address community pharmacy’s funding crisis.

NPA chief executive, Mark Lyonette, said that although the VAT measures were a 'positive signal', they were 'pennies rather than pounds'.

'Another opportunity to fundamentally address the funding crisis in community pharmacy has been missed in this latest Budget,' he added.

While Janet Morrison, PSNC chief executive of the Pharmaceutical Services Negotiating Committee, said that the VAT changes were ‘a critical step if pharmacies are to make headway in making best use of the skill mix that they have’ but ‘small in impact in the context of the current challenges’.

And Dr Leyla Hannbeck, chief executive of the Association of Independent Multiple Pharmacies (AIMp) said that while there should be no VAT on healthcare or NHS services, 'regardless of which staff supplies them', there was 'no point' in discussing the VAT measures as they 'make not much difference to pharmacies bottom lines' and 'do not impact the direction of travel for community pharmacy'.

She also described the lack of additional energy bills support for pharmacies as 'baffling'.