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HMRC: Charities can no longer claim VAT relief on social media advertising

Kevin Cooper

HMRC is writing to charities to inform them of the latest changes to VAT relief on social media advertising. 

Typically, ‘advertising and items for collecting donations’ qualify for a zero-percent VAT rate; however, this is only applicable for advertising to the ‘general public’. 

HMRC is arguing that due to the advancement of social media, most platforms now allow advertisers to target a ‘specific audience’ using comprehensive tools such as advance tracking options to deliver ads to a segment of their wider target market – this form of advertising does not qualify for the zero rate.

The change in relief is expected to shift a weighty cost on to the sector with an increasingly larger number of charities utilising social media channels to reach a wider audience. 

Despite the change in relief for social media ads, adverts placed in trade and religious magazines can still benefit from the zero-percent rate as they are classed as adverts for the ‘general public’. 

If your charity will be affected by the change in VAT relief, please do not hesitate to get in contact with your local Moore office where we will be happy to advise you further.