VAT Advertising Advice for Residential Property Professionals

The Advertising Standards Authority (ASA) published a ruling that outlines how ads for residential property services should quote VAT. In this particular case, the ad referred to a 0.9% selling fee, which appeared with smaller text below stating “+ VAT”. Because it was possible to include the 20% rate in the selling fee percentage (taking it to 1.08%), the ASA concluded that the advertisers should have used the 1.08% figure instead; it was not sufficient to simply state “0.9% + VAT” or “0.9% + 20% VAT”.

The Advertising Standards Authority (ASA) published a ruling that outlines how ads for residential property services should quote VAT. In this particular case, the ad referred to a 0.9% selling fee, which appeared with smaller text below stating “ VAT”. Because it was possible to include the 20% rate in the selling fee percentage (taking it to 1.08%), the ASA concluded that the advertisers should have used the 1.08% figure instead; it was not sufficient to simply state “0.9% VAT” or “0.9% 20% VAT”. This is entirely consistent with the Consumer Rights Act 2015 which requires fees to be quoted including the VAT.

The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing Code (the CAP Code) requires that quoted prices include non-optional taxes, duties, fees and charges that apply to all or most buyers. In the above instance, and in most cases where a fee is expressed as a percentage or as a flat rate, the fee should be advertised inclusive of VAT.

(CAP is the Committee of Advertising practice)

 

Sales

Percentage sales fees should be adjusted, as per the ruling, to include the current rate of VAT e.g. a sales fee of 2.5% VAT should be advertised as 3%. Adding an “inclusive of VAT” type statement is optional.

Flat-rate sales fees should also be adjusted to include the current rate of VAT e.g. a sales fee of £495 plus VAT should be advertised as £594. Adding an “inclusive of VAT” type statement is optional.

Lettings

All tenant and landlord fees (assuming both are consumers not businesses) should be advertised inclusive of the current rate of VAT e.g. a reference charge of £200 VAT should be advertised as £240. Adding an “inclusive of VAT” type statement is optional.

This guidance applies to ads across non-broadcast media including posters, newspapers, magazines, leaflets, mailings, commercial emails, ads on websites, text messages and those on advertisers’ own websites, including social media spaces that they control.

If you’re still in doubt about these requirements, or if your clients include businesses as well as consumers, please contact CAP Copy Advice for fast, free and confidential advice on all aspects of property advertising.