Isle of Man zero-rates medicines supplied under a patient group direction from 9 October 2023 to 31 March 2027

What changed in detail

The Value Added Tax (Drugs and Medicines) Order 2023 (SD 2023/0292) was made by the Treasury on 15 November 2023 and laid before Tynwald on 12 December 2023, under the negative procedure. It came into operation when made, but article 2(2) deems it to have come into operation on 9 October 2023. It applies to supplies made from that date and before 1 April 2027.

Article 3 adds a new item 1A to Schedule 9, Group 12 (zero rating: drugs, medicines, aids for the disabled) of the Value Added Tax Act 1996. Item 1A zero-rates the supply of qualifying goods to an individual where the goods are supplied:

• for the individual’s personal use;
• in accordance with a patient group direction issued under the Prescription Only Medicines (Human Use) Regulations 2005; and
• either by a registered pharmacist, or under a requirement or authorisation in a relevant provision.

The Order also extends Notes (1), (2A), (2C) and (4A) of Group 12 from “item 1” to “items 1 and 1A”, and inserts Note (2D), which defines “patient group direction” by reference to the Prescription Only Medicines (Human Use) Order 1997 as it has effect in the Island.

The explanatory note, which is not part of the Order, says the change brings medicines supplied under a patient group direction into line with medicines dispensed on prescription, and that it mirrors a United Kingdom amendment that came into force on 9 October 2023.

What it means

The zero rate is still in force in November 2026, but it is temporary by its own terms: it covers supplies made before 1 April 2027. A pharmacy supplying medicines under a patient group direction, for example a vaccination or a pharmacy-first treatment, can zero-rate those supplies until 31 March 2027. From 1 April 2027 they fall back to their normal VAT treatment unless the Treasury extends the period, which it would normally do only if the United Kingdom extends its own measure.

The conditions are cumulative. A supply made under a patient group direction but not for the individual’s own personal use, or not made by a registered pharmacist or under a relevant provision, does not qualify.