The ASA/CAP have released a post called: To include or not to include? – VAT in stated prices. I have enclosed the text of the link below, but please have a look at the ASA/CAP site as there are lots of things of interest to anyone with an interest in Ethical Marketing.
The 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 ASA complaints across industries and media, we have some best practice guidance from our Compliance team 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%”.
If you have any questions about specific aspects of your own non-broadcast advertising, please speak to our Copy Advice team for fast, free and confidential advice. We also have further guidance on VAT price quotations here and here.