Much depends on your audience…
Too many businesses get it wrong when it comes showing VAT in the advertised price of goods and services, warns a watchdog.
The correct use of VAT-inclusive and VAT-exclusive prices is a “recurring issue” in complaints to the Advertising Standards Authority (ASA).
Costs promoted in adverts to all or most buyers should always include so called ‘non-optional taxes’ like VAT. And this applies to all advertising and marketing materials, websites and social media posts.
However, there’s more flexibility when advertising is aimed at other businesses.
The ASA says:
Always include VAT when buyers will pay it
If your ad is aimed at both consumers and businesses - and both can purchase the product - you need to quote VAT-inclusive prices.
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.
Make VAT-exclusive prices crystal clear
If you do quote VAT-exclusive prices, make sure they’re clearly intended for buyers who don’t pay (or can recover) VAT. Use clear labels like “business price” or “trade price.”
Show the VAT rate or amount
VAT-exclusive prices must always be accompanied by the VAT rate or amount. If you can quote VAT-exclusive prices, these still need to be prominently accompanied by the rate or amount of VAT, for example, “£100 ex VAT @ 20%”.
New self-help tool
The ASA has created a tool for businesses to check the way they quote VAT: 'Advertising VAT Compliance Tool'
