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VAT on dispensing

Dispensing practices will have to register for VAT from April and will see a major change in the way their income is calculated and paid.

Practices will have to register for VAT in order to reclaim VAT on 'takeaway' dispensed items. A VAT allowance will be paid on personally administered items from VAT-registered practices.

A further change will see the link between drug costs and income disappear.

Instead, practices in England and Wales will be paid a unified dispensing fee. This is expected to deliver the same overall income to the practice as under existing rules.

Container cost allowance will also be abolished, as most dispensing is now carried out using original containers.

Dispensing practices will be able to sign up to a directed enhanced service for quality dispensing, akin to arrangements in the community pharmacy contract.

The Dispensing Doctors Association said the changes should mean no overall change to average incomes, though there would be some winners and losers.

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