HMRC confirms digital advertising VAT relief for charities

The slashing of costs incurred by charities to promote themselves online have been confirmed by HMRC.

This follows a campaign by the Charity Tax Group (CTG) for digital advertising to be exempt for VAT as the costs advertising agencies were incurring were being passed onto charities.

A letter to the CTG in July had said that a number of forms of digital dvertising would not be subject to VAT.

This includes targeting using cookies to identify users that are interested in giving as well as demographic and behavioural targeting.

HMRC has now confirmed that such targeting will not incur VAT in its document Revenue and Customs Brief 13 (2020):VAT charity digital adverting relief.

The move by HMRC is “great news for charities”, said CTG vice chairman Richard Bray.

“We are delighted that after further positive discussions we have had with HMRC, their view of the VAT status of digital advertising provided to charities has been clarified even further,” he said.

“Not only have they accepted a wider ambit for the zero rate, but the classifications of services, based on their policy, will be much easier to apply than appeared the case before the Brief was issued.”

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