HMRC policy update on digital advertising for charities

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Revenue and Customs Brief 13 (2020) VAT charity digital advertising relief

In our earlier blog post we informed you of the correspondence between HMRC and the Charities Tax Group concerning changes to VAT on digital advertising for charities.  

HMRC has now published the official version of these policy changes in: Revenue and Customs Brief 13 (2020) VAT charity digital advertising relief.

We would like to draw your attention to two important developments.

Firstly, there was some uncertainty about ‘location targeting’ which has been cleared up. HMRC now agree that subject to the normal conditions for charity advertising being met, this too may be zero rated.  There is a full list of zero rated and standard rated digital advertising in the Business Brief.

Secondly, as we expected, Business Brief 13 confirms these changes will apply retrospectively. Accordingly HMRC will accept claims for VAT wrongly charged on the relevant forms of charity advertising.

Organisations should take this opportunity to review their portfolio of digital advertising to identify supplies of digital advertising which were wrongly standard rated. This may be corrected by making a claim to HMRC and refunding the tax to the charity concerned. Charities may not claim the tax from HMRC direct. 

It is advisable to seek appropriate professional advice before making a claim to HMRC.

If you have any questions about these policy changes please do get in touch.