§ Mr. HeppellTo ask the Chancellor of the Exchequer (1) what consultations his Department held with the Department of Health in respect of the imposition of value added tax on the recombinant factor VIII product Kogenate; [3130]
(2) on how many occasions he has considered the imposition of value added tax on the recombinant factor VIII product, Kogenate; what was his decision in each case; and if he will make a statement. [3129]
Mr. Heatcoat-AmoryCustoms and Excise advised Bayer in September 1994 that Kogenate could be relieved from VAT as it appeared to fall within the exemption for human blood or products derived from human blood. Customs subsequently discovered that other supplies were treating recombinant products as outside this exemption and to ensure equity reviewed the position. On the basis of836W scientific advice from the Department of Health, Customs ruled that since these products were not derived from human blood, they were taxable at the standard rate of VAT. Bayer was advised of the new ruling on 25 September 1995.
This ruling brings the VAT liability of these products into line both with that applied in other member states under the EC sixth VAT directive and with that of other drugs and therapeutic products. Plasma-derived human factor VIII remains exempt from VAT.