UK Pharmacies are our priority customers

VAT Rate Mapping, Till Setup & Bookkeeping Accuracy for Pharmacies

Pharmacy owners get VAT rates applied correctly at the till and in bookkeeping, so every sale, service and supplier credit uses the right VAT and your returns are accurate.

• 30+ years of experience
• Specialised Pharmacy VAT Expert in UK

What does our VAT rate mapping service include?

You get a done-for-you programme led by a pharmacy VAT Accountant and VAT consultant team that sets the correct VAT direction for all products and services, aligns your EPOS till and Xero, and builds monthly controls your team can run.

• Discovery and VAT risk scan
  We catalogue revenue streams across NHS dispensing, private prescriptions, OTC retail, travel clinic, Pharmacy First, flu jabs, weight management, ear care, diagnostics and delivery. We profile stock by VAT behaviour at 20 percent, 5 percent, zero rated, exempt and outside scope.
  
• EPOS and till configuration
  We map PLUs and barcodes to the correct VAT codes for medicines, medical devices, contraception at 5 percent, supplements at 20 percent, zero rated items and exempt professional services. We set rules for promotions, multi-buys, coupons, refunds, bundles and delivery charges.
  
• Bookkeeping alignment in Xero
  We build a clean VAT code set for sales and purchases covering 20 percent, 5 percent, zero rated, exempt, outside scope and import VAT via PIVA. We set tracking for branches and service lines to support partial exemption and annual adjustments.
  
• Controls and reconciliations
  We produce a monthly VAT pack with DGT summaries, Rx PPD accruals, supplier rebates, buying group commissions and credit notes posted with correct VAT reversal logic. We add retail scheme and partial exemption worksheets where needed.
  
• Training and documentation
  We train front-of-house and back-office teams on rate selection, till use and exception handling, then issue a simple VAT rate guide for the till and an accounting SOP for month end.
  
• Ongoing assurance
  We run quarterly rate reviews, sample test receipts and supplier invoices, and refresh codes when products or services change.

Why do pharmacies need precise VAT rate direction?

Pharmacies need precise VAT direction because sales span standard rated goods, reduced rate contraception, zero rated medicines and exempt medical services, and errors compound across thousands of transactions. A specialist VAT Accountant sets rules that reflect real trading and partial exemption so margins and VAT reclaims are protected.

How do we map VAT rates at the till?

Till mapping starts by grouping products and services by VAT behaviour, then assigning the correct code to each button, PLU and barcode in your EPOS.

• Product groups
  Zero rated: qualifying medicines and specific medical items sold to the public where conditions are met.
  Reduced rate 5 percent: contraception and qualifying health products.
  Standard rate 20 percent: cosmetics, toiletries, most supplements and retail sundries.
  Exempt: medical care delivered by a registered pharmacist where conditions are met.
  Outside scope: gift vouchers issued, charity collections and non-business items.
  
• EPOS rules
  We create category-based VAT defaults and restrict manual overrides to supervisor level.
  We add logic for promotions and mix-and-match so discounts preserve correct VAT apportionment.
  We configure delivery so NHS deliveries stay exempt and 20 percent retail deliveries remain standard rated.
  We test top SKUs and high-risk items such as supplements, pregnancy tests and home test kits.
  
• Front-of-house guidance
  We provide a one-page quick reference with examples that lists common items by rate and a simple path for edge cases.
  

How do we align bookkeeping with EPOS outputs?

Bookkeeping alignment ensures the VAT you file matches receipts and the economic reality of supplies, guided by a VAT consultant who sets codes and checks reconciliations.

• Xero VAT codes
  We create sales codes for 20 percent, 5 percent, zero rated, exempt and outside scope, plus purchase codes for the same and import VAT PIVA. We link revenue accounts to codes by product group so postings are automatic.
  
• Tracking and analytics
  We use tracking for branches and service lines like travel clinic, ear care and Pharmacy First to support partial exemption and any retail scheme you use.
  
• Supplier documents
  We post buying group commissions and supplier rebates with reverse VAT logic, not as simple negative purchases. We validate credit notes and match to original invoices to keep the input VAT trail complete.
  

How do we control edge cases that cause errors?

Edge cases drive most pharmacy VAT mistakes, so we define rules for composite and multiple supplies, bundles and service-product mixes, supported by a VAT Expert playbook.

• Composite or multiple supplies
  We separate a consultation fee at 20 percent from an exempt vaccination where a split is required, or document a single exempt supply where conditions are met and evidence supports it.
  
• Bundles and kits
  We assign rates at line level where EPOS can handle it, or use a documented apportionment for mixed-rate kits.
  
• Refunds and exchanges
  We mirror original VAT treatment on returns and adjust partial exemption calculations accordingly.
  
• Online sales and delivery
  We apply the same VAT mapping in your e-commerce catalogue and ensure delivery rules match the till.
  
• Gift cards and vouchers
  We treat issue as outside scope and redemption by the underlying supply rate with correct Xero posting.
  

How do we keep VAT rates current when suppliers change classification?

Rate maintenance protects accuracy as suppliers alter descriptions or your service mix evolves, which your VAT Accountant monitors through scheduled checks.

• Quarterly rate review to re-sample top sellers and refresh EPOS mappings where the market changes.
  
• Supplier anomaly checks to compare supplier VAT on identical items over time and request corrected invoices or credit notes.
  
• Update process that logs changes in a VAT rate register, updates the quick guide and briefs staff.
  
• Audit trail that stores a versioned mapping file and test receipts for HMRC review.
  

What evidence and data do we need to start?

Project setup is faster when we receive recent trading data and product lists for analysis by a pharmacy VAT consultant.

• Last three months DGT reports and Z reads
  
• EPOS product master with categories, PLUs and barcodes
  
• Top 200 SKUs by revenue and any seasonal lists
  
• Service list with pricing and who delivers the service
  
• Rx statements, PPD schedules and any retail scheme workings
  
• Sample supplier invoices, rebate statements and credit notes
  

How does partial exemption fit into rate mapping?

Partial exemption determines how much VAT you can reclaim on overheads, so sales coding accuracy directly affects recovery. If exempt income is overstated due to miscoding, your recoverable VAT falls. If zero rated sales are miscoded as exempt, you lose reclaim on residual input VAT. A pharmacy VAT Expert sets sales coding that reflects taxable versus exempt correctly, then runs monthly and annual calculations with a clear workbook.

What happens next?

Pharmacies can book a short call with a VAT Accountant to review your EPOS report and sample receipts, then receive a fixed-scope plan to map rates, align Xero and deliver the first month end pack.

RX Virtual Finance LTD is your pharmacy-specialist VAT consultant, VAT Expert and VAT Accountant for VAT rate direction, EPOS setup and bookkeeping accuracy, delivering clean compliance and stronger cash flow.