From Civil Society
Charities could save millions on digital advertising costs after HMRC updated its VAT guidance, according to the Charity Tax Group (CTG).
HMRC previously said that most digital advertising should be subject to VAT. It had raised assessments to recover VAT from some advertising agencies. These costs were generally being passed on to charities and amounted to millions of pounds of irrecoverable VAT, according to CTG
CTG had been engaging with HMRC on this and received a letter in July 2020 which confirmed that VAT was no longer considered due on internet search browsing advertisements, except where they appear on personal social media accounts.
HMRC has issued Revenue & Customs Brief 13 (2020): VAT charity digital advertising relief to confirm the views expressed in the letter. HMRC has also now accepted that payments for location targeting are within the zero rate.