Charities ― advertising

Produced by Tolley
Charities ― advertising

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Charities ― advertising
  • Zero-rating of advertising services
  • Types of charity advertising supplies which qualify for relief
  • Communication with the public ― communication media
  • Communication with the public ― meaning of ‘the public’
  • Exclusions from relief
  • Digital advertising relief
  • Design and production services
  • Services of advertising agencies for design and production
  • Digital advertising services
  • More...

This guidance note covers the VAT treatment of advertising, printing and items related to donations that are supplied to charities. This note should be read in conjunction with the Printed matter and e-publications ― overview and Charities ― overview guidance notes.

Zero-rating of advertising services

The VAT legislation provides for certain advertising services provided to a charity to be zero-rated.

For the meaning of charity in the context of this zero-rating, see the Charities ― overview. It should be emphasised that for the purposes of this zero-rating, supplies to a charity’s trading subsidiary do not qualify.

Types of charity advertising supplies which qualify for relief

The VAT legislation says that the following types of supplies qualify for relief:

  1. the supply to a charity of a right to promulgate an advertisement by means of a medium of communication with the public VATA 1994, Sch 8, Group 15, Item 8

  2. a supply to a charity that consists in the promulgation of an advertisement by means of such a medium VATA 1994, Sch 8, Group 15, Item 8A

  3. the supply to a charity of services of design or production of an advertisement that is, or was intended to be, promulgated by means of such a medium VATA 1994, Sch 8, Group 15, Item 8B

  4. the supply to a charity of goods closely related to a supply within (the bullet above) VATA 1994, Sch 8, Group 15, Item 8C

HMRC suggests that the relief covers all types of advertising on any subject including staff recruitment. It also makes clear that the name or logo of the charity does not have to be included on the advertisement in order for a supply to be zero-rated.

Communication with the public ― communication media

Charities can only receive VAT free advertising in media that communicate with the public.

Examples of media that might be used to communicate with the public include ‘conventional advertising media’ such as:

  1. television

  2. cinema

  3. billboards

  4. the sides of vehicles

  5. newspapers

  6. printed

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