You may have recently received communication from us informing you that the ASA has published a ruling that states advertisements for residential property services should now quote VAT.
The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing Code (the CAP Code) requires that quoted prices include non-optional taxes, duties, fees and charges that apply to all or most buyers. In most cases where a fee is expressed as a percentage or as a flat rate, the fee should be advertised inclusive of VAT.
Percentage sales fees should be adjusted, as per the ruling, to include the current rate of VAT e.g. a sales fee of 2.5% + VAT should be advertised as 3%. Adding an “inclusive of VAT” type statement is optional.
Flat-rate sales fees should also be adjusted to include the current rate of VAT e.g. a sales fee of &495 + VAT should be advertised as &594. Adding an “inclusive of VAT” type statement is optional.
All tenant and landlord fees should be advertised inclusive of the current rate of VAT e.g. a tenant reference fee of &200 + VAT should be advertised as &240. Adding an “inclusive of VAT” type statement is optional.
This guidance applies to ads across non-broadcast media including posters, newspapers, magazines, leaflets, mailings, commercial emails, ads on websites, text messages and those on advertisers’ own websites, including social media spaces that they control.
However, while letting agents are obliged to show fees along with rents, there is no legal obligation on sales agents to show their fees. The Committee of Advertising Practice ruling therefore only applies to sales agents who advertise their fees.