Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
The CAP Code requires that prices quoted in marketing communications read mainly by consumers should include VAT (European Pilot Training Academy Ltd, 19 January 2005). It is acceptable to show VAT-exclusive prices as well as VAT-inclusive prices but the inclusive price should be given more prominence.
If the medium is read both by consumers and the trade but a marketing communication features a product that will obviously interest only trade readers (e.g. a photocopier), the product may be shown with a VAT-exclusive price only (though the amount or rate of extra costs should be stated). Confusion can come if the ads or the product would be of interest to both parties. In 2004, the ASA investigated a brochure ad for a web-hosting package. The advertiser asserted that its ad was intended for small office, home office and small to medium-sized enterprises and was read equally by consumers and the trade. Because the ad was not read mainly by businesses able to recover VAT, the ASA asked the advertiser to either include VAT or give inclusive and exclusive prices equal prominence (1&1 Internet Ltd, 20 October 2004).
If the medium is read by the trade only, marketing communications may quote VAT-exclusive prices only (though the amount or rate of extra costs should be stated).
Last modified : 29 June 2010