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Changes to VAT rules hit charity advertising

by | Jan 16, 2020 | Charities & not for profit

HMRC has announced changes to the VAT rating of advertising by charities on social media.

Most charity advertising spend in the UK is zero-rated for VAT. However, HMRC has ruled that because ads on social media are targeted at a specific demographic rather than the general public, they should no longer be VAT-exempt. These changes could see a significant rise in advertising costs to charities.

The changes open the door for HMRC to assess a number of advertising agencies that work with charities, with a specific focus on collecting VAT for recent social media advertising work. There is also a possibility that the rules could extend to other kinds of digital and online marketing.

The industry body, The Charity Tax Group, urged the HMRC to re-consider its position, however HMRC has declared its position will remain unchanged.

If you think that these changes may affect you, please contact Stephen Mason or Tara Aldwin our in specialist Charity team.