1 hour ago
Mar. 18, 2026 by Amanda Laskey
The case of Boehringer Ingelheim Ltd. v. Commissioners for HM Revenue and Customs (2024) is currently being reviewed by the Upper Tribunal, commonly referred to in tax cases in the UK. HMRC appealed against the 2024 decision in the First‑tier Tribunal in which it was held that payments by a pharmaceutical manufacturer to the UK’s Department of Health and Social Care under medicines price control schemes may be treated as post‑supply price reductions—meaning the value-added tax, or VAT, originally accounted for on the medicines may have been overstated and could be due for a VAT refund.
The outcome of the case could unlock millions of pounds in VAT reclaims for U.S. biopharma companies with UK operations. A judgment is expected in the next three to four months.
What does this mean for U.S. biopharma companies?
If the 2024 decision stands, this not only affects how VAT is treated on the supply of medicines under these pricing schemes in the UK, but it could open opportunities for VAT refunds on prior sales made to the National Health Service.
The Boehringer claim, in particular, referenced around £21.5 million (over multiple years/claims), but the total amount at stake in the industry is estimated to be around £2.5 billion. Even if operations are located outside the UK, VAT obligations arise based on where the product is sold, meaning U.S. manufacturers may have also unknowingly overpaid. The impact of this case could also significantly influence pricing strategies or business planning.
It’s also worth noting subtly different rebate schemes exist across the European Union with Boehringer winning a similar case in Germany.
Key considerations
VAT adjustments can be performed only in relation to transactions that took place in the previous four years. This means that as time goes on, the amount of VAT that can be recovered reduces. As such, qualifying U.S. biopharma companies should act now, notify HMRC that they are affected, and register protection claims now to protect and preserve their right to recover VAT once the ruling is confirmed.
Read more about our VAT insights and resources.
RSM US contributor: Samantha Payne, senior manager
About Amanda Laskey
Amanda is a senior manager in the tax services practice in the New York City office of RSM US LLP, focusing on clients within the life sciences industry. In addition, she is a member of the firm’s Industry Eminence Program and works alongside RSM’s chief economist and other senior analysts to understand, forecast and communicate economic, business and technology trends affecting middle market businesses. She has nearly 10 years of experience assisting clients with claiming research and development tax credits at both the federal and state levels.
