VAT in Advertising

Jan 18th '18

To include or not to include? – VAT in stated prices.

The Committees of Advertising Practice (CAP) Code requires that prices in ads include non-optional taxes, duties, fees and charges that apply to all or most buyers. This applies to all advertising and marketing materials, including websites and social media profiles.

Because the correct use of VAT-inclusive and VAT-exclusive prices is a recurring issue in Advertising Standards Authority complaints across industries and media, the CAP Compliance team have issued some best practice guidance to help you get your price quotes right.

Here are some pointers to get you started:

  • Include the VAT when any prospective buyers will pay VAT

If both consumers and businesses are likely to see the ad, and are both able to buy the product(s), you’ll need to quote VAT-inclusive prices.

  • Clearly address any VAT-exclusive prices

If you quote VAT-exclusive prices, make sure they are clearly addressed to buyers who do not pay (or can recover) VAT, e.g. by clearly stating “business price” or “trade price”.

  • Include a statement of the amount or rate of VAT payable when quoting VAT-exclusive prices

If you can quote VAT-exclusive prices, these still need to be prominently accompanied by the rate or amount of VAT, for example “ex VAT@20%”.

Source: CAP

If you have any questions about specific aspects of your own non-broadcast advertising, please get in touch or take advantage of our Bespoke Copy Advice service. Our fast and confidential service is essential for advertisers, agencies, media owners/providers, who want to check how their prospective advertisements (broadcast and non-broadcast) measure up against the UK Advertising Codes.