Rule 3.18 of the Committees of Advertising Practice (CAP) Code states that quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers.
If it is not possible to calculate the charge in advance, for example because it depends on the consumer’s circumstances, the advertisement must make clear that the charge is excluded from the advertised price and state how it will be calculated (Rule 3.19).
One off charges
The Advertising Standards Authority (ASA) does not ask for all compulsory charges to be included in prices: one-off and periodic charges may be presented separately, providing the ad makes it clear that these are payable, and what they are.
VAT must be included in any quoted price, unless all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable. If a product or service is available to both customers who pay VAT and those who don’t, VAT-inclusive prices should be given. Ads may also state VAT-exclusive prices however marketers should ensure that a VAT-inclusive price is given at least equal prominence to the VAT-exclusive price.
The ASA upheld complaints about an ad for printing products which stated a VAT-exclusive price only, because they considered that both business and non-business consumers may wish to purchase these products. They told the advertiser to ensure that, where an ad was directed at both consumers and businesses, the VAT-inclusive price was given, and that VAT-exclusive prices were accompanied by a prominent statement of the amount or rate of VAT payable (Computer Risk Management Ltd, 30 March 2016).
Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA. CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
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