01 November 2018 
Andrea Marshall, Tax Specialist
The Charity Tax Group (CTG), with assistance from BUFDG members and BUFDG, has been engaged in a dialogue with HMRC concerning its policy relating to VAT on digital advertising, following reports of HMRC action to assess for VAT in cases which we did not regard as valid. Following extensive discussions with a coalition of affected charities and universities, CTG commissioned an opinion from respected barrister Peter Mantle, which has been sent to HMRC. Despite persuasive and diplomatic efforts, CTG has now received a disappointing response with which CTG/we do not agree. However, this appears to be a reasonably ‘final’ HMRC view (although we would like to think that they might be willing to think again in due course, and we are considering what can best be done about that).
To ensure that you are aware of the overall HMRC stance, we provide below a verbatim quote from their most recent letter on the subject:
“We have identified four scenarios where advertising takes place online. We consider the VAT treatment to be as follows.
You will probably wish to consult your own advisers and media agencies as regards the actions you could take in respect of this information. We have no more information as to what each of the above descriptions specifically covers, which we acknowledge may not be easy to interpret. However, we hope that the information that has been elicited from HMRC is helpful to you.
CTG and BUFDG do not regard this issue as closed. Further consultation and consideration will be ongoing to seek a better outcome for the charity sector as a whole.
