VAT Rules on Charity Advertising: New HMRC Brief

Following representations made by the Charity Tax Group to HMRC there has been an acceptance by HMRC that the application of the Zero Rate relief used by Charities of all types and sizes on Advertising costs can be widened. Technology has moved advertising offerings into ever more creative spaces in terms of how online adverts are able to “target” possible markets more effectively for their clients. The interpretation of the VAT regulations have been complex and therefore need to catch up. Thanks to the on-going work of the Charity Tax Group we’ve now got some published guidance to assist both advertising suppliers as well as charities keen to reduce irrecoverable VAT costs, at this most difficult of times for the sector.

As ever, this is not a “carte blanche” zero rating for all types of digital advertising as HMRC maintain the view that advertisements sent to individual social media and subscription website accounts are regarded as targeted at the individual and remain standard rated. An understanding is needed, therefore, on the nature of any digital marketing campaign that a charity is engaged in – how is the selection criteria being established – the Brief illustrates acceptable criteria, subject to all other conditions being met.

As we continue to help charities unlock past “lost” VAT on their costs, advertising is an area we always review, so it will be a great opportunity to revisit this in light of this clarification. If your charity or charity client is concerned over the complexities that VAT brings or would like to see if they too could unlock past irrecoverable VAT on their costs then help from Centurion is only a call away. We look after clients across the UK and in these days of technology can be the VAT specialist “near you” to help and support. Contact us at emailus@centurionvat.com or get in touch with your usual Centurion VAT contact.

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