VAT Reduction - National Pharmacy Association Advice To Members, UK

Main Category: Pharmacy / Pharmacist
Article Date: 27 Nov 2008 - 4:00 PDT

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On the reduction of VAT to 15%, as announced in the Chancellor's Pre-budget Report, Raj Nutan, Head of Business Development at the National Pharmacy Association, said:

"HMRC has confirmed that there is no legal requirement for pharmacies to pass on these savings, as pricing decisions to consumers are made by individual businesses - so we will not instruct our members to do so. However, we would advise pharmacists to consider the image that they are portraying. If pharmacists are not seen to be passing on VAT savings, public opinion of pharmacies may be affected.

"Factors to consider include: On small items, such as a packet of paracetamol, the consumer may hardly notice a 2.5 per cent reduction in VAT. Also, for those pharmacies not operating EPOS, the work involved to reduce the price of every item in the pharmacy may not be worthwhile.

"Pharmacies may wish to consider reducing the price of a selection of products for which a price reduction would be most noticeable, for the consumer. These may include fast-moving lines or expensive items. Pharmacies also need to consider the operational issues surrounding passing on VAT reductions."

Source
Geraldine Clark
Press Manager
National Pharmacy Association Ltd
Mallinson House, 38-42 St Peter's St, St Albans AL1 3NP
UK
http://www.npa.co.uk