December 19th, 2019 / Insight posted in Articles

HMRC changes VAT position on charity social media advertising

The VAT treatment of social media advertising for charities is fast becoming an area of concern for a number of agencies. In recent weeks HMRC have stated that in their opinion almost all types of social media advertising for charities is standard rated, and not zero-rated as is the case for most other types of charity advertising.

The basis of HMRC’s position is that in their view, the selective nature of social media advertising, i.e the ability to select individual recipients by demographic group, behaviour etc. is incompatible with the scope of the zero-rate which requires that quilting adverts are available to the public.

In recent weeks HMRC have issued assessments against a number of agencies, looking to collect VAT not only of recent social media advertising for charities, but on all relevant advertising work for the last four years.

It would also appear that although HMRC are currently concentrating their attention on social media advertising by charities via platforms like Facebook etc. the arguments being put forward could easily apply to a wide range of digital advertising.

Our specialist VAT team is currently working closely with a number of agencies on this issue, as well as applying a lead role in industry wide discussions being organised by the IPA. If you would like to discuss this issue in more detail please contact Esther Carder, Geraint Lewis or one of our VAT directors who can be contacted on 020 7566 3830.